Since it’s already stressful and first impressions can make or break a new hire’s success on the job, why not go all the way? Here are ten new and creative on-boarding ideas that will make the newbie’s first day at work memorable — but for all the wrong reasons.

These 10 On-Boarding Fails Might Make the New Hire’s First Day Their Last

No matter how confident they seem, the new hire will probably be worried about making a good first impression with their co-workers and their boss. And no matter how happy they seem to be to have gotten the job, you can be sure they will still feel anxious and nervous about what to expect on their first day at work in a new company.

New employees aren’t the only ones who should be worried about making a good first impression. Given the investment of money and resources that go into the hiring process, employers should also be worried about what happens on the new hire’s first day on the job, and throughout the on-boarding process. For both parties, mistakes, on-boarding mis-steps and mis-cues can all send a new hire packing, and send the employer back to square one.

The first day at work can be every bit as stressful for the new hire as their interview was. On-boarding shouldn’t feel like a Darwinian experiment meant to weed out those who are too weak to survive!

On-Boarding Fails – 10 Ways to Ruin a New Hire’s First Day at Work

1. Make it a paperwork party.

And they thought your application was long! Nothing is more fun for someone who is excited about their new job than spending their whole first day in HR filling out paperwork (unless their new job is actually filling out paperwork in HR).

2. Don’t give them the key – to anything.

Don’t give them the key to the bathroom, the break room, the supply room, their filing cabinets — or anything else at all. They put “problem solving” on their skills list, didn’t they? Let’s see how they do on their own!

3. Don’t set up their workspace.

You’ve had two weeks to get ready for the new hire’s first day at work, but is that really enough time to set up their phone and computer? I mean, after all, what if something happens and they don’t come in that day at all. You would have done all that work for nothing. Better to wait and do it while they watch.

4. Change their job title, job description, salary, or reporting relationship.

Now that they have broken ties with their former employer, turned down other interviews and stopped sending out resumes, you’ve got them right where you want them. Why not demote them right away, and make them earn back the job you hired them to do?

5. Make them move out before they can move in.

The previous job holder left the newbie’s work space a mess, or maybe you have been using it for file storage. Either way, it’s their problem now; let them figure out what to do with all that junk.

6. Lecture them about the mistakes of the previous job holder.

You certainly don’t want your new hire making the same mistakes that got the last guy fired (or made him want to run screaming out the door). Be sure that you spend some time telling the newbie what not to do. In fact, your whole on-boarding orientation could be a recital of all the flaws and failings that have gotten people fired from your company.

7. Don’t have their back during the intro round.

If your new hire’s shirt has a coffee stain on it, their fly is unzipped, they have tags sticking out or they came back from the bathroom trailing a bit of toilet paper, that is going to make for awesome office hilarity as you introduce them to all their co-workers and company executives. SAY NOTHING.

8. Hit them up for ideas on how to save your business.

There’s nothing like putting the fear of layoffs and closures on the table with new hires to get them working at their most motivated, productive best right out of the gate.

9. Warn them about their new co-workers.

Now that they are part of the team, it’s going to be really important for them to know how awful everyone else is who works there. You wouldn’t want them to be surprised later on. Make sure they have a good grip on all of the weakness and shortcomings of their teammates, and let them know that you expect them to make up the gap.

10. Let them know about the ones that got away.

If the new hire was not your first choice for the job (even if the hiring committee didn’t agree with you) or if you offered the job to other candidates who turned you down, make sure you let the new hire know about this on their first day at work. That way, they will realize just how grateful they should be to have the job.

As a new franchise owner you are probably keenly aware that you face all the same challenges faced by any new small business owner. Here are four tips that can help you be a better leader as a first-time boss, right out of the gate.

First-Time Boss – 4 Leadership Tips for New Franchise Owners

At the end of the day, the success of your new franchise might come down to leadership more so than any other factor, so here are four important ways you can improve your leadership abilities.

If you have just opened up your first franchise business or you are considering franchise opportunities that will allow you to become a small business owner for the first time, you probably have a fairly long list of priorities to accomplish. One “to do” item that might not have made your list yet is improving your leadership abilities, but we would like to make the case for putting this priority high up on your list.

Is leadership really that important? The CEO Institute sums it up this way, “Leadership is the major factor that makes everything work together seamlessly; without leadership, all other business resources are ineffective.”

While we have all come across organizations (and most of us have even worked in some) that managed to carry on and even grow with poor leaders in place, it begs the question: How much more successful could those businesses have been with good leadership at the helm?

As a new franchise owner, you probably have thought about the type of leader you want to be, especially if you have worked in an organization with bad leadership before. Though you might have the best of intentions, the pressures of acting as a leader for the first time (especially in light of all the other challenges you will face as a business owner) might cause you to revert to some of the negative leadership styles you have seen demonstrated before.

First-Time Bosses – 4 Key Leadership Principles for Franchise Owners

Focus and Vision

“The leader’s singular job is to get results.” Daniel Goleman, author of Emotional Intelligence, writing on Harvard Business Review

There will be many, many situations and problems that arise in the life of a franchise business that have the power to distract franchise owners from the goals they need to remain focused on in order to run a successful business. When focus is lost, and key goals are no longer the focus of day to day priorities, organizational vision goes by the wayside too.

The Big Picture

“A leaderless organization is like an army without generals.” The Importance of Leadership in BusinessSmall Business Chronicle

Franchise employees aren’t foot soldiers, but the analogy is worth evaluation. Soldiers on the front line don’t usually have the big picture; they see only a small portion of the battlefield. They can only be successful with leadership that understands how to effectively deploy all of the units, weapons and strategies to achieve victories in individual battles; and ultimately, to ‘win the war.’

New franchise owners – even those that find themselves fulfilling ‘front line’ roles within the business as so often happens in the early days of any small business – must also maintain perspective relative to the big picture. You have to know how all the parts of your franchise business need to work together in order to achieve the short and long range goals you have for the organization.

Self-Awareness and Empathy

“When good leadership is in place in a company, it can be felt throughout the entire organization… Bad leadership can also be felt throughout the entire organization – only not in a good way.” Good Leaders Are Invaluable To A Company. Bad Leaders Will Destroy It. Forbes Magazine

In the early days of a franchise business, the franchise owner might be the only leader. As the business grows or new franchise opportunities open up and are added to the organization, more leaders will be put in place. Franchise owners must be aware not only of how their leadership style affects the organization, but must also be empathetic to how their employees are faring under the other leaders and managers in the organization. Leaving a bad leader in place anywhere in the franchise will be a drag on productivity and morale.

Doing Things Right vs. Doing the Right Thing

“A leader is someone who does the right thing, whereas a manager does things right. Or to put it another way, management is an occupation, leadership is a calling.” Importance of Developing Leadership SkillsBusinessDictionary.com

There is no final destination on the journey toward becoming a good leader; it’s a constant evolution. Don’t be afraid to ask trusted peers, friends, and even the people who work for you how you can improve as a leader, and make it safe for them to give you constructive feedback. Don’t be afraid to admit your mistakes. Don’t be afraid to move people out of leadership roles they are not ready or suited for. Don’t be afraid to recognize and reward staff members who step up inside or outside of their regular roles. Hire smart people who are good for your organizational culture, equip them to move and be ready to take a few chances on their recommendations.

As you grow your new franchise or open up new franchise locations, remember that you will constantly be given opportunities to learn new things about yourself and others that can make you a better leader. The more you risk changing yourself, the greater your potential reward.

You might also like: Sole Props – The Rise of Independent Workers in the US – Infographic

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In addition to the lists of the 10 Worst and 10 Best States for Startups, we’re suggesting five ways startups can thrive, no matter where they’re planted.

Top 10 Best States for Startups and the 10 Worst; But 5 “Buts” to Help You Thrive Anywhere

As a leading credit card processing company with headquarters in western Washington, we are thrilled but not all that surprised to find that Washington State was No. 1 on the list of Top 10 States for Entrepreneurs as reported on businessnewsdaily.com. That said, it is impressive that six of the top ten and all of the top five states ranked as most conducive to startups are in the western portion of the U.S.

Top 10 Best States for Startups

  1. Washington
  2. Wyoming
  3. California
  4. Colorado
  5. Oregon
  6. Texas
  7. Delaware
  8. Massachusetts
  9. Montana
  10. Missouri

The list’s rankings are based on a number of factors, including number and quality of startup opportunities, the state’s business climate, business taxes, productivity, cost of living, whether there is adequate available workforce, median education, and access to capital.  Among those states rated as least favorable to startups, many made the list because of a high rate of failed businesses in those states.

Top 10 Worst States for Startups

  1. West Virginia
  2. Hawaii
  3. South Carolina
  4. Pennsylvania
  5. Virginia
  6. Maryland
  7. Vermont
  8. Arkansas
  9. Rhode Island
  10. Alabama

Moving to one of the states where startups are most likely to succeed might not be an option for you; however, there are things that you can do to make sure your business can thrive anywhere. We came up with five principles entrepreneurs and business owners should take to heart.

5 Buts for Startups That Want to Thrive

Scrimp – But Never On Quality

There is nothing wrong with thinking lean; in fact, it’s often a business necessity for startups. Scrimping and cutting costs wherever possible can help reduce operating costs and give startups enough time to begin to generate growth momentum.

But scrimping on quality is always a mistake! This doesn’t mean that your startup has to have the best, it means you need to provide good quality and value for customers’ day in and day out.

Save – But Spend on Marketing

When business contracts, marketing activities are often first on the chopping block, with some startups and small businesses opening their doors without even having a formal marketing plan at all.

But cutting the marketing budget when business is slow will usually just make things worse. When business slows, put more resources into marketing, not less. Likewise, if you cannot tie results to marketing efforts, it might be smart to change your marketing mix, but don’t eliminate it!

Raise Working Capital – But Preserve It

Low cash flow or lack of working capital set aside for unexpected problems or emerging opportunities can bring startups to their knees. Startups that open their doors with enough working capital and the ability to generate cash flow needed to meet operations and grow have an advantage right from the start.

But depleting working capital reserves or spreading cash flow too thin can put startups on shaky ground. Consider using cash flow management tools like invoice factoring to speed up cash flow or preserve working capital by using merchant cash advance or equipment lease financing instead of buying equipment outright.

Go for Broke – But Live to Fight Another Day

The very nature of startups involves risk taking. There is no such thing as a sure thing! There are times in the life of a startup – and in any business – where it’s absolutely essential to take risks that take entrepreneurs outside of their comfort zones.

But taking risks doesn’t have to mean risking everything. The bigger the risk you are considering, the more vital it is that you identify warning signs or statistics that allow you to minimize losses and enable your startup to live to fight another day.

Grow Big – But Keep Thinking Small

As startups become small businesses then grow into midsize companies and even large corporations, new employees will come on board, infrastructure will get bigger and – inevitably – many things will change.

But the values, innovation and culture that you set out to create in the beginning don’t have to change. While you are still small, think about the characteristics that set your business apart whether you’re located in one of the worst or best states for startups, so the most important values they can be strategically preserved and promoted as your company grows.

The number of U.S. full and part time independent workers soared over 42 million in 2018. Businesses who find ways to serve and sell to independent workers have a lot to gain.

6 Ways to Sell More to Independent Workers

The number of U.S. full and part time independent workers rose astronomically from 2011 to 2018, going from 16 million to just over 42 million people over the 8 year span, according to MBO Partners State of Independence in America survey. During the same time period, the number of high-earning independents (earning over $100,000 annually) went from 12.5 percent of indies to over 20 percent – more than 3 million workers. By 2023, over half of American workers will have worked as an independent worker at some point during their career.

What is an Independent Worker?

Independent workers are people 21 years old and older who are self-employed as freelancers, contractors, consultants, temporary and on-call workers or who are working on fixed-term employment contracts expected to last less than one year. In addition to adding numbers to their ranks, the study found that independent workers:

  • Generate more than $1.3 trillion to the economy
  • Are multi-generational – Full-Time Indies are comprised of 37% Millennials, 28% Gen X and 35% Boomers/Matures
  • 79% are happier working on their own than at a traditional job
  • Love having the ability to control their own schedules, with 76% of women and 58% of men saying that flexibility was the key reason for choosing the independent route, and 71% of women saying they wanted to control their own schedule
  • Love being their own boss, with 67% of men and 58% of women citing this as their top reason for choosing independent work
  • Know no borders – 1 in 5 have customers outside the U.S.

Since the post-recession economic recovery has been described as a jobless recovery, it’s not really surprising that entrepreneurial-minded and professionally ambitious workers turned to independent work as a primary or secondary source of income during recent years. Given the rate at which this segment is expected to continue to grow, businesses who find ways to serve and sell to independent workers have a lot to gain.

6 Ways to Win the Hearts, Minds, and Purchases of US Solopreneurs

Scale Offers and Options

If it were easy, everyone would do it. The truth is, it’s not always easy to scale offers to the size, scope and price a solo-preneur would find affordable and attractive that will also still be profitable for a business to sell; but the long term benefits could be well worth it. As independent workers become small business owners and continue to grow, these early partners – businesses that cared enough to tailor programs to help independent workers – stand to win.

Find Common Ground

Independent workers might not be able to meet you during a 9-5 workday or come to a downtown office location. In fact, meeting at a large corporate site might be intimidating or even be a turn off to independent workers, who might feel like they don’t belong or who don’t want to be part of a big organization.

Meet independents on their own ground, a coffee shop or another neutral site, or connect online (virtual ground) and be prepared to accommodate their schedules.

Invest in Gathering Places

Sponsor events or extend meeting space to local indies who might have difficulty finding locations suitable for customer events. Consider advertising with co-working office spaces. Host solo-preneur networking events and workshops.

All of these entrepreneur-friendly actions position your business to be able to sell to independent workers now, help you establish brand awareness and trust that brings them back to you when they need your services or products at a later time, or help you win with referrals as they tell other small business owners about your presentation or brand.

Give Away Expertise

Providing your expertise as an event speaker, coach or mentor might cost you little more than a few hours each month, but might be invaluable to the independent workers who benefit from your experience and advice. Starting a regular podcast or hosting webinars gives you a low-cost entrepreneur marketing tactic that can generate a wide following and leads among Indies.

Scale this type of give-away by building email contact databases segmented so that you can keep your brand in front of independent workers by providing them advice and content via email on a regular basis.

Support Indies with Online Content

As with any other vertical, starting the conversation with independent workers and educating them along the buying journey is critical. Publish white papers, reports, statistics and apps that can help independent workers and small business owners find – and trust – your business. Dedicate web landing pages and blog articles to topics that are likely to interest and engage indies. Use social media to engage and dialogue with them.

Demonstrate the Long-Term Value of Partnership

One size does not fit all, especially when it comes to independent workers. Although frugality and caution can be found in buyers of any-size organization, it’s even more imperative for independent workers to maximize the return on investment for each and every dollar they invest in improving their business.

You might also like: What Small Business Owners Wish They Knew at the Start-Up

Put the value of your partnership into language and numbers they can understand, and show them how your business works to ensure they get the best results from the services or products they buy from you. Success shouldn’t be measured only by whether your business achieved its goals, but also by the extent to which your business helped its clients achieve theirs.

It is this type of mindset that can help you win the hearts, minds and purchases of independent workers, and it is this type of mindset that will receive the most gratification when your clients leverage your products or services to grow.

Infographic - 8 Years of Insight on the Growth of the Independent Workforce

Source: https://www.mbopartners.com/state-of-independence/

You might not be able to manufacture customer happiness, but you can follow this proven recipe for making customer happy, courtesy of a customer satisfaction survey from Accenture.

Customer Satisfaction Survey Reveals Key Drivers for Consumer Satisfaction

An Accenture Global Consumer Pulse Survey reveals a list of “customer satisfaction ingredients.” Here’s the list of drivers the customer satisfaction survey found when it comes to what U.S. consumers really want from the brands they do business with:

  • Good value for the money – 8
  • Great customer service – 7.9
  • Competitive prices – 7.8
  • Competent, intuitive staff – 7.8
  • Trustworthy – 7.8
  • High quality products – 7.8
  • Hassle-free – 7.6
  • Knowledgeable experts – 7.2
  • Lots of options – 6.7
  • Cater to my preferences – 6.5
  • Good people – 6.5
  • Engaging – 6.3
  • Innovative – 6.2
  • Relevant to me – 5.8
  • Responsible – 5.4
Customer Satisfaction Survey with a Recipe for Making Customers Happy

Customer Satisfaction Survey: Meeting or Beating Expectations

It’s important to understand that this list of fifteen consumer satisfaction drivers are those that must be fulfilled simply in order to meet expectations, not exceed them. Satisfaction is defined as:

  • fulfillment of one’s wishes, expectations or needs
  • the pleasure or feeling that one derives from being satisfied
  • the payment of a debt or fulfillment of an obligation
  • what is felt to be owed or due to one

In other words, these are things customers expect to be true each and every time they do business with your brand – what they feel your brand owes them in exchange for patronage. If you fail to meet any of these standards you could be losing customers without even knowing why, since only about 4% of dissatisfied customers actually speak up and give a brand a chance to make things right. That means that 96 percent of customers who are dissatisfied with your brand may never even voice a complaint. In fact, 91 percent of customers who are dissatisfied leave and never come back (“Understanding Customers” by Ruby Newell-Legner).

96% of customers who are unhappy with your brand might never even voice a complaint.

Understanding Customers – Ruby Newell-Legner

The imperative to meet customer expectations every time they do business with your brand becomes even more significant when you consider that it could take more than ten positive experiences to make up for just one unresolved negative customer encounter.

Acquiring a new customer could cost 7x more than retaining existing customers.

White House Office of Consumer Affairs

The cost of acquiring customers could be 6-7x what it costs to keep existing customers coming back, or even more (White House Office of Consumer Affairs). From a purely practical standpoint, it’s well-worth taking this list of customer satisfaction survey findings and using it as a checklist for evaluating the buying journey in your business.

Customer Satisfaction Survey: Stats Show What It Really Takes to Make Happy Customers

Most business owners understand how pricing, quality and perceived value relate to customer satisfaction. In fact, most business owners have probably already adjusted them in order to maximize the positive impact they have on the customer experience. Of the remaining 12 customer satisfaction survey findings, most can be placed in three main categories, and these may represent areas where business owners will find the ingredients they are lacking when it comes to their brand’s recipe for making customers happy:

Brand Representatives

  • Employees provide a high level of customer service, sales-expertise and advice
  • Employees who interact with customers have the right skills, understand and anticipate customer needs
  • Employees make it easy to do business with the company
  • Employees try to personalize and tailor customer experiences
  • Employees communicate effectively and personably
  • Employees can be creative in resolving customer issues

Brand Personalization

  • The buying journey is personalized to customer preferences, needs, desires and past interactions
  • Brand communications make customers feel more personally connected to the brand
  • Brand values are relevant to the customer’s personal values
  • The brand offers the products/services customers want, and provide the right options to allow for customer personalization
  • The brand is innovative, earning customer intrigue and interest

Brand Integrity, Intelligence and Compassion

  • The brand is intuitive in anticipating what customers want
  • The brand is innovative (a leader in some way)
  • The brand is environmentally responsible
  • Marketing and customer information is interesting, relevant and engaging
  • Customers feel the brand prioritizes and invests in hiring and training employees to be sure they have the expertise, skills and attitudes needed to make customers happy
  • The brand hires “good people” that customers enjoy working with
  • The brand exhibits values customers perceive as compassionate (because they are relevant to their own values and interests)

As you can see, several of the customer satisfaction survey findings fall into more than one category and may even vary from customer to customer depending on their own personal values and perceptions. The more of these ingredients that go into the customer experience, the more likely it is your brand will perfect its recipe for making customers happy.

You might also like: 5 First Impressions that Will Bring Customers Back

What small business owners wish they knew offers insights about what they learned in the early days of their startups and what they would have done differently if they could.

What Small Business Owners Wish They Knew as Startups

Reversing a downward trend that started in 2009, the 2015 Kauffman Report on Main Street Entrepreneurship shows that, while the rate of entrepreneurship still remains below that of pre-recession levels, it’s finally on the upward swing.

For instance, in 2009 there were 188.3 businesses in the U.S. for every 100,000 people. In 2014, there were 130.6 businesses for every 100,000 people. Let’s take a closer look at the makeup of the American entrepreneur from these 2014 statistics:

  • 310 out of every 100,000 U.S. adults started a new business each month (up from 280 in 2014)
  • More than half were started by people aged 45 – 64
  • Fewer than half were started by people aged 20 – 34
  • Immigrant entrepreneurs were 2x as likely to start a business as native-born entrepreneurs
  • 5% of entrepreneurs were immigrants, up from 13.3% in the 1997 index
  • 2% of 2014 startups were male-owned vs. women-owned businesses – putting the percentage of women-owned startups barely above the two-decade low

Statistically speaking, coming up on two years in business, more than 70% of these 2014 startups are likely still in business (Washington Post), and according to U.S. census data about small business published by sba.gov, the small business landscape in general is made up of the following business types for small employer firms:

  • 44% – S Corporations
  • 22% – C Corporations
  • 16% – Sole Proprietorships
  • 11% – Partnerships
  • 7% – Nonprofits

Among nonemployer small business, 86% are sole proprietorships, 7% are corporations and 7% are partnerships. Hindsight is 20/20!  With two years of business ownership behind them, studies show that what small business owners wish they knew before launching their startups would lead to some things they would have done differently.

10 Things Small Business Owners Wish They Knew as Startups

1. What Small Business Owners Wish They Knew Most of All: How to Handle Finances

68% of small business owners say their #1 biggest regret is that they didn’t spend more time learning about financial management before they launched their business. For instance, three out of ten small business owners used the same bank accounts for personal and business transactions, which can be a big problem for many reasons. Whether your business is a corporation, partnership, nonprofit or sole proprietorship, it’s imperative that you keep personal and business finances separate.

2. How to Understand Finances, Financial Statements and Taxes

3 out of ten small business owners say they wish they had hired an accountant from the beginning, and 42% actively work with accountants for advice and financial management help. When it comes to small business finances, few areas are as complex, intimidating and potentially problematic than small business taxes. There are more than 2,000 items in the IRS.gov list of current forms and publications related to business taxes. While the IRS website can help answer your questions about small business taxes, having professional help or advice from an experienced tax preparer is a must!

3. They Needed More Money

Most U.S. startups – 64% – were launched with $10,000 or less in funding; only 13% had more than $50,000. Writing on businessnewsdaily.com, Wayne Connors, managing partner of 401kInvestor.com said that entrepreneurs are overly-optimistic when projecting sales, don’t know the cost of customer acquisition and underestimate how much startup capital they’re going to need. Business coach Tom Perkins recommends that entrepreneurs have at least 6 months of working capital on hand when they launch.

While we offer startup funding, if your startup small business has been in operation for even just a few months it might qualify for one of our small business loans or a business line of credit. If your small business sells directly to other businesses, you may also be able to speed up cash flow by factoring customer invoices instead of waiting for them to pay. We would be happy to talk about small business loans and financing programs with you – contact us for more information or to get a free, no-obligation quote for business financing.

4. Had More Information About Payment and Card Processors

One of the most important decisions a new small business owner will make is deciding what type of payments to accept and finding the right payment processor. We specialize in helping our clients both in terms of the cost of merchant services and payment processing and in outfitting their organization with the most appropriate payment processing equipment, software and systems

5. How Hard the First Year Was Going to Be

Most aspiring entrepreneurs can’t wait for the day that they can open the doors of their new business; however, 68% of small business owners say that the first year is the hardest (quickbooks.intuit.com’s $10,000 Strong and Growing).  When they needed help, they turned to these sources for external guidance during the first year:

  • 38% – Online search
  • 23% – Friends who are also business owners
  • 17% – Formal education or training
  • 12% – The Small Business Administration (SBA.gov)

6. Had Written a Better Business Plan

Taking the time to write a good business plan isn’t just an exercise in business ownership. Thinking through each of the components that make up a business plan can help ensure that you have anticipated the challenges you will face in financing, opening, operating, and growing your business. The detail that goes into your plan tells employees, investors, lenders and other interested parties what your dream is and how you plan to get there.

7. Spent More Time and Money on Marketing

Even if a lot of people you know have expressed interest in your startup business concept or how convinced you are that “if you build it, customers will come,” the truth is that many small business owners over-estimate how quickly they can land customers and grow. Don’t wait until your business opens to start investing in marketing and advertising; the sooner you can begin to build brand awareness, the more likely your business is to enjoy a successful grand opening and grow to the point that revenue makes the enterprise sustainable.

Your start up marketing plan might be simple or complex. Here are some of the must-have’s and most commonly used marketing tactics you should plan to deploy from the earliest days of your business (and even before it opens its doors):

  • A vision statement (what your business will look like when it’s all grown up)
  • A mission statement (how you’ll make the vision a reality, often references customer types, employee culture and organizational values)
  • Market research that demonstrates demand for your business – can also help you refine your offerings so they align with market place demand
  • Identify target markets and ideal buyer types (or buyer personas)
  • Identification of direct and indirect competitors – competitive analysis
  • Differentiation – positioning of your business vs. competitors
  • Marketing strategy and tactics
    • Strategies; e.g.: find and attract likely buyers, produce repeat sales, increase retention, develop customer loyalty, produce referrals, etc.
    • Tactics; e.g.: website, blog, email, direct mail, flyers, events, trade shows, social media, sales pros, customer service, loyalty program details, webinars, seminars, whitepapers, coupons, sales, etc.
  • A marketing budget – it should never be “zero” because at a minimum your business must have a web domain, website, and probably business cards, flyers and other startup supplies
  • Goals, measures and reporting

8. Had Found a Mentor

Half of all small business owners said they wish they had found a mentor who could advise them during the pre-launch and early days of running their business. Check out our article about how you can improve your small business by setting up your own small business advisory board, which can act as your personal business “Dear Abby,” giving you people who you can turn to with questions and problems during the early days of running your startup.

9. Knew When to Say Yes and When to Say No

Many small business owners wish they had more management and leadership experience. They would have known better when to say “No” in refusing outside work or being distracted from their core business products and services to pursue tangents. Others say they would have delegated more to employees, worked harder to make sure that employees felt like they were an important part of the team, and trusted staff to get work done without feeling like they had to micromanage every aspect of their startup business.

10. Didn’t Try So Hard to Be Perfect

There’s a saying in business that goes, “You win some, you learn some.” All failures are not fatal and making mistakes can be an important part of the process for new business owners. Not only can mistakes reveal how to do better, sometimes mistakes can even reveal opportunities you might have otherwise missed. Sometimes it’s about the journey, not the destination. Take the advice of what small business owners wish they knew before they started their business to heart and use their experience to become better prepared for your own business launch.

You can use the three core goals of financial management to determine which business ideas are most likely to help your business grow.

Hit 3 Goals with All Your Financial Management Strategies for the Win

Few entrepreneurs suffer from a lack of ideas, but knowing which ones should get the green light isn’t always apparent. Pursuing the wrong financial management strategies can result in wasted business resources, slowing or even stalling your business growth.

It’s important for every business owner to choose goals and values by which they can measure new ideas and initiatives, to be sure they will contribute to company growth. The three core goals of financial management can do just that. You may be surprised when you realize that these three core goals are about a lot more than just managing finances, demonstrating clearly how inter-dependent seemingly disparate business ideas really are.

Use these 3 Financial Management Strategies to Guide All Your Business Decisions

1. Will It Maximize Profits

It doesn’t take long for most new business owners to realize that more sales don’t always equate to more profits, and profit it what a business needs to reinvest in itself and grow more quickly. You should take the time to calculate profit relative to your business as a whole, and to each of the individual products and services you sell so that you understand:

  1. Gross profit margin (Formula: sales – cost of goods sold / sales)
  2. Operating profit margin (Formula: EBIT / sales)
  3. Net profit margin (Formula: net profits after taxes / sales)

Gross profit margin reveals the amount of profit your company earns after the cost of goods sold is deducted. The cost of goods sold might include the money paid to a manufacturer or distributor, cost of raw ingredients, cost of marketing and advertising, staff-related expenses and any other inputs. This shows how efficiently your company is using labor and supplies relative to the amount sold.

Operating profit margin compares earnings before interest and taxes (EBIT) to sales. High operating profits is an indication that the company is getting a good return on the cost of goods sold; conversely, low profits might indicate a need to reduce input costs or manage operations more efficiently.

Net profit margin shows what the company has after everyone has been paid, including the government. Net profits are ultimately the money your business has to invest toward growth, since all other revenues are eclipsed by the cost of goods sold and taxes.

Though many business owners think they have to increase prices in order to maximize profits, price isn’t the only factor contributing to profitability, as the formulas above illustrate. In fact, sometimes raising prices is the wrong way to maximize profits, if a price increase makes your business less competitive and you lose volume of sales which, at a lower price, actually result in the maximum profit your business can earn on a given item.

2. Will It Minimize Costs

It’s obvious from our discussion of cost of goods sold that minimizing business expenses can have a positive impact on your profit margins. The lower the cost of inputs and operating expenses needed to produce sales, the more money is left as gross profit (and ultimately net profit). However, just as raising prices isn’t always the best way to maximize profits, lowering costs isn’t always the best decision for your business.

For instance, what if you change suppliers based on your costs for the raw ingredients you need to produce one of the items your company sales, but your new supplier provides faulty or sub-standard quality materials? You may have temporarily decreased the cost of goods sold but may have increased expenses and reduced profits in the long term as your business has to handle returns, exchanges, customer complaints, bad reviews and customer defections.

As you can see, what seems to be the most obvious answer isn’t always the most accurate one. Let’s say you need to free up working capital in order to buy inventory and equipment to launch a new product or service. On the face of it, the ‘cheapest’ way to pay for the growth initiative seems to be to wait until you have the money saved up; however, this could be a costly decision. Competitors may outmaneuver you or new rivals could emerge and establish themselves in the market while you wait on the sidelines. In the long run, taking potential sales and profits into account, the less costly decision might actually be to take advantage of a merchant cash advance or business line of credit to grow more quickly.

3. Will It Maximize Market Share

Formula: Company sales / total sales in its industry (by geography, if applicable) over a certain period of time; in other words, of the sales possible during a given time period, what percentage did your business earn?

So far we have talked a lot about areas pertaining to finance and accounting; however, marketing concerns affect each of these three goals as well, and is obviously relevant to maximizing market share. Marketing (price, product, promotion, and distribution) decisions affect the cost of goods sold as well as company costs.

It’s worth noting that of all the reasons cited by entrepreneurs whose startups failed, poor marketing was actually the biggest reason startups failed. Yet for many business owners, marketing seems an afterthought; a topic they quickly try to master when projections don’t match up with results after opening their business or launching new product lines.

Maximizing market share is one of the core goals of financial management strategies for an obvious reason; more customers and less sales lost to competitors creates more opportunity to realize a profit. In addition, more sales often translate into lower cost of goods sold as inventory can be ordered in larger quantities at a lower price.

Customer chargebacks send a signal that something didn’t go quite right. What you learn from failed transactions could help you turn today’s chargebacks into tomorrow’s sales, depending on how you respond.

Customer Chargebacks Shouldn’t Be the End of the Story

No retail or wholesale distributor looks forward to customer refund requests; however, momentary customer dissatisfaction doesn’t need to be the end of the story. You have an opportunity to do better next time, make things right, go the extra mile and otherwise turn frowns upside down, when you take the time to discover the root of your chargebacks and respond the right way.

Inspired by a Chargebacks911 whitepaper titled Understanding the Sources of Chargebacks, here are four strategies that can help you improve your refund policies and implement post-chargeback marketing tactics. The marketing work you do after a failed customer transaction can help you avoid a bad review and renew customer goodwill toward your brand.

4 Ways to Respond to Customer Chargebacks

1. You Made a Mistake – Now What?

20-40 percent of customer chargebacks are attributed to merchant error. Whether the cause is internal process or human error, chargebacks will happen when what the customer receives isn’t what they ordered or wanted. Here’s what to do (and not to do):

Don’t inflate customer dissatisfaction by making them feel like they are on trial. If you made a mistake, own up to it and apologize. The less combative your return process is, the more likely the customer is to accept an exchange for the item they originally wanted.

If you’ve already owned up to your mistake, apologized and tried to make things right but the customer still demands a refund, give it, but don’t give up. Allow for a cooling off period then reach out to the customer later on with a special offer. If they take you up on it, make sure you get it right!

2. Your Customer Says They Didn’t Make the Purchase – Now What?

1-10 percent of chargebacks are attributed to criminal fraud. While criminal fraud is a reality, it’s worth noting that there are times customers mistakenly think their credit or debit cards were used inappropriately when in fact they were not. This commonly occurs when a spouse or family member uses a credit card without telling the card owner, the card owner forgets about making a purchase or when the merchant name on the credit card statement doesn’t match the business name.

Make sure your card processing company lists your business name properly on customer transactions. If you believe a refund is being requested in error, follow card processor and bank dispute policies appropriately. Sometimes you’ll have to agree to the refund, but there may be instances where you simply need to clear up misunderstandings. Reach out to your customer and ask whether this is the case. Most will be appreciative that you caught the mistake and feel reassured that their card hasn’t been compromised.

3. Your Customer Has Buyer’s Remorse – Now What?

Buyer’s remorse is a common – but serious – problem for merchants, one that can even produce emotional and physical discomfort in buyers who feel like they made a mistake; such as: anxiety, nausea or breaking out in a cold sweat. It’s such a big deal that there are even laws and regulations in some industries (real estate, auto sales, etc.) where buyers have a specified amount of time to change their mind.

If you believe buyer’s remorse is at the root of a customer refund request, see if they’ll share their concerns with you so that you can reassure them or somehow mitigate their discomfort. If not, and you make a refund, reassure them that you value their business and hope they’ll consider doing business with you when they’re ready. Make it a point to reach out to them at some point in the future to see if they are ready to make the purchase they weren’t quite ready to make before.

4. Your Customer is a Serial Returner – Now What?

There are people who routinely make purchases for the emotional satisfaction it produces knowing that they will return them almost immediately. There’s even a name for them: Returnaholics. There are even a few who buy items to use for a specific purpose or event and then return them. These serial returners might not mean any harm, but chargebacks cost your business in many ways (time, accounting, restocking, re-marketing, etc.) beyond the refund.

Serial returners may need to be educated or encouraged to change their behavior. In some instances, the behavior is so costly to your business that they might need to be encouraged to shop elsewhere. As in the case of any type of business, there are some customers who aren’t good for your business.

Your response to a buyer’s refund request can set the stage for future business transactions; one in which the customer rewards your leniency by purchasing even more and telling their friends how great you were to do business with. Make sure you have a plan for processing customer chargebacks that leaves the door open for tomorrow’s sales.

As we near the end of the year, it’s important to tie up all the loose ends of your business so it can start rocking and rolling when the New Year arrives. Here are six things to add to your year-end checklist.

A Year-End Checklist Can Prepare Your Small Business for a Fast Start in the New Year

How you choose to close out the current year may determine how fast your small business grows in the New Year. Make sure these six tasks are part of your year-end checklist to ensure your company is ready to hit the ground running next year.

1. Revisit your goals from this year

In order to make progress as a small business owner, it’s critical to review your progress on the goals you set for this year as part of your year-end checklist. Not only will you see the progress you’ve made, you’ll discover valuable insights that will benefit goal-setting for the coming year.

Say one of your goals was to increase your customer service satisfaction rating by 5 percent year over year by observing/coaching/documenting employees weekly to see if they greeted each customer on arrival to begin the customer experience and ended each customer experience with a specific procedure, such as:

  • walking the customer to the door
  • promoting add-on sales at the point-of-sale
  • offering guarantee or warranty services
  • signing the customer up for your store’s loyalty and rewards program
  • and so on.

Assuming you kept weekly documentation of these actions, it will be straightforward to see the customer service review trend year over year. Build a chart, if you don’t already have a system in place, and evaluate your weekly/monthly/yearly trends.

Where your team failed to hit your customer service rating goals, find out what happened during a given time period that might have caused your customer service rating to drop. Was it an isolated occurrence? Does the dip continue to occur throughout the month? Review customer comments and be sure to identify the reason for the lower customer service rating and create a specific plan to improve in that area over the next year. Revisiting specific goals will take some time but it’s extremely important to understand where your business is in order to move forward from there.

2. Assess the books

Bookkeeping is one of the most important preventative measures you can take as a small business. It’s a good best practice to keep all documents in hard and soft copy form. This way you have a backup in case of emergency. Keeping financial forms is also very important as you prepare for tax season. 40 percent of small business owners hate tax season, are you among them? If you are, it may be a smart move to outsource to a tax professional, so you can spend your time in other areas and still be confident that the monetary section of your small business is under control.

3. Backup all digital files

Backing up your files is time well spent. If your phone, cash register, POS equipment or computer got stolen today, what important documents would be lost? You would not only be losing your documents and folders, but also your business contacts. As a small business owner you rely heavily on your portable devices, so do yourself a favor and prevent yourself from wondering “what would happen if my things were stolen.” Make sure you are backing all of your important data up on a regular basis so that you can quickly get back to business in the event that any of your equipment is stolen, lost or damaged.

4. Audit your website

While you should be doing this on a regular basis, the end of year is a good time to make sure all website links work, phone numbers are accurate, hours of operation are up to date and that your website looks New Year ready. With percentage of time on mobile (51 percent) surpassing the time on desktop (42 percent) it’s crucial that your website is mobile friendly and your site is aesthetically pleasing (both on desktop and mobile). Cleaning up your website may take some time if it’s not regularly monitored, but having a strong website will drive more customers to your business.

5. Communicate

If your business is thriving and booming, let your team know! Schedule a team meeting where you can call out accomplishments for this year as well as discuss the goals set for next year. It takes a team to run a successful operation and they will appreciate you taking time to thank them for their contributions. You may also have a few goals that they can help add measures to track those goals. This boosts the team moral and generates a positive progress note going into the new year.

6. Set goals for the New Year

Let’s say you want to make a goal to sell more of a specific item, such as appetizers or cocktails (for a restaurant) or service agreements or accessories or something else this year. It’s hard to measure if you’re making progress if you don’t explain how you are going to reach this goal, when you’re tracking this goal, or what accessories you’re even talking about. Consider using the SMART goals format.

  • S – Is your goal specific? What kind of accessory would you like to sell more of?
  • M – Is your goal measurable? How will you measure if you are selling these accessories?
  • A – Is your goal agreed upon? Are all stake holders in your business ok with this goal?
  • R – Is your goal realistic? Set the bar too low and it’s meaningless, set it too high and it’s outrageous. In either case, it can lead to your team not taking your future goals seriously.
  • T – What is the timeline? When do you plan to achieve your accessory goal?

After inputting SMART format into your original accessory goal it turns into “sell # more a month until December of next year by observing/coaching/documenting our employees weekly to see if they promote the item appropriately to customers.” Ensuring your goals are specific and reachable will help you track your business progress.

Incorporating these six tasks into your company’s year-end checklist will help you move faster than your competitors going into the new year.

Not every year is going to be the best year for your business, so even more reason to make sure you identify and understand areas which need improvement. A year-end checklist can be invaluable in helping you see what needs to change next year. Maintaining organization and keeping your eye on the prize will help you reach your yearly goals, and ultimately reach your business goals.

 

The questions business owners should ask themselves can tell them all they need to know about whether their organization is healthy and prepared for growth, or whether they need to make changes to remove obstacles that are standing in their way.

Slow – or Grow? 5 Key Questions Business Owners Should Be Able to Answer

In a world where companies need to stay one step ahead of the competition to succeed, it’s important to ask yourself as a business owner “Am I obstructing or nurturing my business?” Here are five questions business owners should ask themselves, to find out whether they are helping or hurting their chances of business growth.

1. Does my business foster effective, open lines of customer communication?

Current and potential clients need more than just an option to comment on a social media post to voice their needs. Whether you’re a start-up or an established business, it’s important to both open up for discussion and listen to the conversations. Often times businesses fail because they do not listen to the needs of the customers not because they choose to ignore it, but because they never give themselves a chance to hear it.

A quote from the book Nail It then Scale It: The Entrepreneur’s Guide to Creating and Managing Breakthrough Innovation, written by Nathan Furr and Paul Ahlstrom, asks: “Which would you rather do – talk to customers now and find out you were wrong, or talk to customers a year and thousands of dollars down the road and still find out you were wrong?

2. Where are we headed next?

Complacency is something you can’t afford. In an ever-changing market place, no matter what your business is, anticipation is the key to success. As Helen Keller once said, “The only thing worse than being blind is having sight but no vision.

Knowing where you want to go and knowing how to get there are two very different things. Certainly, without preparing for growth and setting goals you’re unlikely to reach your intended destination.

As a business owner, you certainly hope demand for your product and business will go up. It’s imperative to understand the projected need for your products as well as to answer the question ahead of time, “How will we meet this need?” Failure can sneak up on you quickly if you don’t have a plan. Depending on your business the plan will vary, but the basic idea to have in place is to set a goal, and draft out how to reach it.

You might also like: 6 Musts for a Business Year-End Checklist

3. Are we the Flintstones or the Jetsons?

Ok, so obviously no one is out there clocking into work using the tail of a colorful parrot after driving to work in their foot-pedaled stone age car, and certainly no one is flying in to work and dropping down through a tube into their desk chair. When deciding whether your company is more like the Flintstones or the Jetsons, the idea is to ask yourself, am I keeping up with the times to stay ahead, or am I making things painful for my clients and customers?

This is inclusive of all aspects of business including software programs, ways of communication, and most importantly technology. Not only does old technology drive people away (and not to mention sometimes insane), but it also leaves your business susceptible to viruses and being hacked. Keeping up with, or better yet, ahead of the times not only keeps your current clients stay satisfied, but also attracts new clients to your business.

One of the most important areas of technology to assess is your business’s POS (point of sale) process, whether this occurs online or off. Today’s customers anticipate seamless point of sale transactions that enable them to enroll in loyalty and rewards programs, set up or change account settings, automate payments for future purchases, generate automated responses such as downloads, send receipts directly to their email or mobile phone, and much more. A slow, complicated or clunky point of sale process can can dampen a customer’s enthusiasm for returning to your business in the future, cause them to abandon their cart before completing their purchase and even create sufficient frustration to result in a bad review for your business. 

4. Are we connecting with our audience?

If you were a comedian, would you bust out a political commentary type of joke set about taking rifles away from cowboys for performances in the heart of Texas? Probably not. Plain and simple, the thing to remember in business is you can never forget who your audience is.

When asking yourself this question, make sure to evaluate if your message is too broad, too narrow, or just right. Yes, a broad message might reach more people, but it won’t resonate or be as effective as a narrow, targeted messaged that focuses on your main clientele. Especially if you have limited resources, focusing on getting your messages across in a streamlined fashion is a non-negotiable.

5. Is our ignorance really bliss?

They say if a tree falls in the forest it really does still make a sound. Well, as a business owner, you can’t really afford to test out that theory.

Listening to the pains of your customers might sound like a task easy to avoid, especially if business is booming. However, before you know it that boom could turn to bust if the needs of your clients are not addressed.

Understanding the needs and pains of your customers will help you reinvent your marketing and product strategy to ensure you are always making it happen for your clients, sometimes even before they even know they need it.

Is your company speeding up or slowing down? Status quo is a fallacy; you’re either gaining ground or losing it, every time you flip your sign from “Closed” to “Open” to start the day. Make sure you understand your goals and keep them in the forefront of even day to day operations.