S & H Tax Accountants

Category: business partnerships

When to raise your prices

It’s an inevitability in every business – you have to raise your prices to continue making a profit. There are many factors that go into deciding how much to charge, all of which are dynamic. The rising cost of goods, inflation, and a changing market are just a few reasons why any small business has to reevaluate its rates regularly to stay competitive (and to stay in business).

While it may seem like you just set your prices or recently adjusted them, this is a task that should be done once a year at minimum – preferably more. Read on for some signs your business is ready to charge more.

1. You have a loyal customer base

Once you’ve been in business for a while, it’s likely that you’ve built up a loyal base. People will return to you when they know they will get a quality product. They’re also more likely to return when they get to know you personally.

If your business has a lot of customers who bargain shop because you offer rock-bottom prices, choosing to raise your rates likely won’t go well. Wait until you’ve established a base of loyal customers who will be happily willing to pay more knowing they’ll get fantastic, personal service from you.

People buy from those they know, like, and trust, so once they get to know, like, and trust you, they’re likely to keep coming back. Build relationships to foster that customer base.

2. It’s been a while since you raised your rates

The rate of inflation is reason enough to raise your prices, otherwise you’re operating at a loss. Keep track of the rate of inflation each year and adjust accordingly. People generally understand raising prices in times of high inflation–even if they don’t like it–since every business on earth must either keep up, or accept the loss to their bottom line. It’s just good business sense.

For decades, the average rate of inflation has hovered somewhere around the 3% mark, with some years worse than others. If you’ve paid attention to the news lately, you’ll know that things are a little different in 2022. Take into account what’s going on in the bigger picture, and then adjust your rates accordingly to avoid absorbing the hit.

3. You’ve added value

This doesn’t necessarily mean that you’re offering more literal services for the same price. Value can also come in the form of increased experience or new skills. When you and your staff have added value to what they’re able to offer, that can and should be passed along to your customer base. People are almost always willing to pay more for a superior product or service.

4. Your competitors are charging more than you

Be sure to take a look around to see what your direct competitors are charging. As your business evolves and becomes better with time, check to make sure that you’re comparing yourself against other businesses of the same class.

If you don’t keep up with regular rate increases, you may be surprised to find that competitors you initially considered to be equal to you have raised their rates significantly. You will then find yourself in a position where you have to raise your rates significantly in one go just to keep up. Keep on track by regularly checking what they’re doing.

5. Your close rate is over 80%

Some people like hard and fast numbers, so this is a good rule of thumb. You want to aim for your close rate to be between 75-80%. If it’s lower than that, you likely have an issue with perceived value. If it’s higher than that, you’re probably overworked and also attracting mostly bargain hunters – not a true loyal customer base.

If everyone is saying yes to your prices, you probably aren’t charging enough.

Final Thoughts

There is a lot to consider when raising your rates, and you don’t want to do too much too fast. Make a point to reevaluate your rates every six months, and you’ll find that you can keep your customer base while also keeping up with the increased cost of doing business.

If you need advice, on how setting new prices may effect your accounts and how this would then effect your costs, please contact S & H Tax Accountants. We have qualified staff that can help you in the best possible way. Book a consultation with one of our accountants today, call us at 03 8759 5532 or emails us at info@sahtax.com.au.

12/09/2022
The differences between wages, salary, commission, and bonuses

There are a few different methods that employers use to pay their employees, and while they may have similarities, they each also have their own implications for your business and its employees. On top of that, there may be a blended model at play, in which you offer two types of compensation at once, such as a wage and bonuses.

How you pay your employees will impact your finances and your reporting requirements.

Read on to learn the differences between the main ways of earning money in the workplace.

Wages

Most entry-level positions offer an hourly wage in exchange for work. An hourly wage might be $10. So if the employee works 8 hours that day, they would be compensated $80 for that day.

There are minimums set by law which vary depending on where the business operates. Typically, the minimum wage is directly related to the cost of living in that area.

Generally, there are a set number of hours that can be worked in a week, and working beyond that maximum entitles the employee to a higher rate of pay. There may be premiums associated with working undesirable shifts, or an even higher rate of pay that employees are entitled to for working on holidays.

Because of the number of hours worked, the specific days worked, and overtime, the amount an employee will potentially earn each year can vary widely when paid with hourly wages.

Salary

A salary is the standard compensation for management and upper-level positions. It is an agreed-upon annual total, where a certain number of hours worked per week is expected – typically 35 to 40. There will be other requirements outlined, such as how many days per week are expected.

Depending on the schedule, the total salary is divided into equal payments for each pay period. Often, a salary is agreed to as an annual figure, with each payment equally divided by the number of payments. If you pay an employee a salary of $60,000 a year once a month over 12 months, you would pay $5,000 each payment, not accounting for any deductions.

How a company manages its payment schedule will vary from company to company.

Any other pay, such as overtime worked, commissions earned, or bonuses, are separate from salary. Many companies don’t offer overtime pay for extra hours worked, but they may offer commissions or bonuses for performance.

Commission

This is a form of compensation that is based on performance. The amount an employee receives can vary drastically, depending on how well they perform in a pay period.

Commission is typically a calculated percentage of the value of goods or services sold. It is meant as an incentive to drive employees to make sales. For example, you may offer to pay $1,000 as a commission for each car sold. An employee who sells 10 cars in the pay period would receive $10,000 commission.

All earnings made by commission are counted as taxable income.

Some salaried or hourly positions offer a commission on top of regular earnings. However, some positions, especially those in sales, can be based solely upon commission. This means that if the employee doesn’t sell anything, they don’t get paid.

Bonuses

A bonus is a compensation type that is not guaranteed. It is usually tied to some kind of company goal, usually driven by sales or performance. A bonus might be awarded on an individual basis, or for a team or other work group.

The idea behind a bonus is to create an incentive to meet a specific goal. It is rewarded when the goal has been reached, or evaluated at specific times. Bonuses are offered on top of a wage, salary, or commission.

Because of the unofficial structure, bonuses are loved by some and loathed by others. It can be motivating to receive a bonus, as it’s completely separate from what an employee already earns. However, it can also leave employees feeling disgruntled if they feel they weren’t supported well enough to reach the goal and therefore missed out on the bonus. If the goals are unrealistic, employees may also struggle with motivation even if they are offered a bonus.

Final Thoughts

Whatever payment structure your company follows, make sure you are consistent and fair as an employer, and follow all applicable laws. Contact us to learn more about different forms of compensation and what they mean for your bottom line. S & H Accountants Melbourne offer payroll service for small businesses. Contact S & H Tax Accountants Melbourne to discuss your payroll needs.

05/09/2022
6 Unconventional Ways to Market Your B2B Company

Sometimes you want to try something new when it comes to networking with other business owners. Here are some unconventional ways for you to grow your network and bring in new leads.

1. Collaborate with others in the industry

You know your niche, so you know the questions to ask others when it comes to your industry. Collaborate with people who fit your ideal market. For example, you could create a newsletter where you ask people in your niche market questions about the industry, or you could send out a survey to your market for the purpose of creating a report about the state of the industry. Ask the people you want to work with if they’d be a speaker at an event you host. The more people you speak with, the more your name will be seen as a leader in the industry, so don’t be afraid to reach out to people to share their insights.

2. Try a new social media platform

You want to be where your customers are, but if you’re looking to network with new people, you may want to try a new social media platform. If you’ve always used Facebook, give LinkedIn a try. Learn about how to use the new platform–including any groups or communities you can be part of. Once you’re on the new platform, look for leaders you can connect with and start sharing your content with a new audience.

3. Make videos

Users are increasingly engaged by video content. It’s personal, it shows the human side of your business and it fosters relationship building. You don’t have to spend a lot of time or money creating video content, either. Using the camera on your smartphone, you can film yourself talking about your services, your business, or sharing insights about your industry. You can even record personal messages to go out to leads, so they can get to know you better.

4. Attend industry events

If you offer services to a particular niche, look into whether you’re able to attend conferences and trade shows for that niche. For example, if your business helps lawyers, find out if you can attend legal networking events. Go to the events with the goal of getting to know other people, rather than focusing on selling your services. Ask lots of questions so you can get to know others and gain insights into the industry.

5. Host an event

A virtual event with a guest speaker and information relevant to the industry is a great way to network. Make sure you or someone from your business can speak at the event, and market your event to potential clients in the industry. Ask what information is important to your audience right now and host an event that addresses those pain points.

6. Become a resource

It may sound counterintuitive, but if you start referring people to others, those on both sides of the introduction will remember you as someone helpful. Have a list of service providers you trust and whose names you’re willing to share with others. Introduce people to each other and tell them why you think they should get to know each other. You can also share valuable content, guide people to the resources they need, and answer questions in your niche.

Write a list of the types of service providers people in your niche typically need and have some names handy as referrals. These may include business lawyers, marketers, importers, and various vendors. They’ll all remember you for referring them.

When people see you as a trusted resource, they’ll see your value and come to you for your insights.

If you have any questions about your accounting or want to know more about how we can help you with your finances, contact us to discuss your needs.

20/04/2022
4 Tips for Positioning Yourself as a Market Leader
Small business owners often feel that they have to do something to stand out from the crowd and attract an audience. If that’s how you feel, you’re definitely not alone. Many business owners try to stand out by creating fancy websites that grab attention. Those may work in the short term, but it’s worth considering other ways to market yourself as an industry leader and build relationships with your ideal customers.

So how can you position yourself as a leader?

It’s all about establishing trust with your clients by showing them that you’re an expert in what you do and you care about their pain points.

Here are four tactics you can use to build relationships that turn prospects into clients.

1. Reach out on social media

Social media is a great place to raise brand awareness, but you can also use it to highlight your expertise. Show your customers you understand their needs by sharing content relevant to them. If your clients are in a specific industry, share posts about that industry. If they have certain needs in common, write about those needs.

Topics you could write about:
- Changes in legislation that might affect them
- Trends you see in their industry
- Seasonal issues that would affect their business
- Major upcoming issues and how to address them
Ask questions to better understand what they want to read about or to encourage discussion. When they comment on your posts, respond. Answer questions, thank them for commenting, and find ways to take the conversation further.

You can also do searches on social media for groups related to your industry. Look for groups that are asking questions in your area of specialty, then provide answers to their questions.

2. Write articles for contribution sites

There are many “contribution sites” seeking great content. If you have something to say that’s relevant to your clients, write articles and contribute them to those sites. Once the article is posted, share it across your social media platforms and emails, to encourage people to read.

3. Encourage testimonials

Social proof shows prospective clients that there are people who love your company, and your products or services. People want to work with companies they like and trust, and they rely on the word of other people to help them determine whether they can trust your company.

When you have enthusiastic clients or customers, encourage them to share their thoughts through testimonials and reviews on social media. Ask for ratings and reviews on your social media sites, encourage clients to share information about your business to their networks, and ask your really happy clients to write a testimonial or be the subject of a case study for your website.

4. Focus on a niche

It’s a lot more difficult to be a leader in anything if you’re trying to help everyone in any area possible. Helping everyone with everything is also a recipe for burn-out. You become a specialist by knowing one or two areas really well. Focus on one or two industries or niches that you can become known in based on what your ideal customers need from you. When people have an issue related to your specialty they’re likely to come to you, but if they only think of you as a generalist, you might wind up far down their list.

Final thoughts

With a little work and time spent getting to know your ideal clients, you can effectively position yourself as a market leader.
04/03/2022
3 Reasons Why Business Partners Break Up and How to Prevent Them

For many business owners, partnerships are an ideal way to run a business. Operating a business with a partner means you don’t have to make all the decisions on your own. It means you have someone there with you, to help you carry the burden and share ideas with. That can be a great thing, when it lasts.

Unfortunately, many business partnerships fail. Although they fail for a variety of reasons, there are some main factors that contribute to a business partnership breakup. Here are 3 reasons business partners break up, and steps you can take to prevent it from happening to you.

1. Unequal contributions

All partnerships go through periods where one person contributes—their time, money, energy, or other resources—less than the others. That’s normal. When it happens over a prolonged period or becomes a pattern, resentment can set in and the other partners can begin to feel taken for granted.

In some cases, a disparity in contributions is natural. For example, if one of the partners has a lot more money or time to invest. These situations require a conversation, however, to ensure that the inequality is addressed and made up for in other ways. If one person has more money to contribute, can the other make it up by contributing more time? If one partner is in a stressful period—maybe they need to step back for a few months due to health issues—can they pick up the slack later so the other partner can take some time off?

Make sure this discussion involves quantifiable amounts. You can’t measure “work extra” but you can measure “work an extra 6 hours a week for three months.”

Unequal contributions can be addressed and managed but all partners need to talk about the situation and develop a reasonable and realistic plan for ensuring the disparity doesn’t become an insurmountable problem.

2. Not hiring help

Partnerships run into trouble when the people involved think they can handle every issue that comes their way, even if it falls outside their area of expertise. It doesn’t matter how many people are involved in the partnership, if none of them are good with numbers none of them should be doing the accounting.

When people take on too many activities outside their expertise, problems arise. Mistakes get made and people get blamed. Relationships can sour.

Discuss with your partners your areas of expertise and activities that you aren’t comfortable doing. Any tasks that no one has expertise in should be given to a professional so that each of you can focus on the areas you’re good at and comfortable in.

3. Differing visions

Business partners should have a shared vision for the company so they’re all working towards the same goals. It’s okay for partners to have slightly different views on how to achieve those goals, but overall the vision should be aligned.

Problems can take hold when partners have deeply different visions for the company and how to meet their goals.

Ensuring a shared vision is an important step. To do so, make sure your company has a formal, written strategic plan. Work with your partners to write and review the plan periodically. Make sure everyone remains committed to the same vision, and address any shifts in perspective that may have occurred.

If you’re about to start a business partnership, discuss with your partners why they want to run a business, what their vision is for the company and what their long-term goals are. Make sure everyone is at least somewhat aligned.

Final thoughts

Business partnerships can be incredibly rewarding, but they also have the potential for issues. Open communication about your ability to contribute, your skill sets and your vision will help your partnership to stay on track and prevent a breakup.

24/06/2021
Social Media Etiquette: 12 Quick Tips for Professionals

With social media, you can connect with business associates quickly and creatively. But this communication mode is not without risk. A thoughtless post can offend customers and other business partners and damage relationships rather than build them. By following a few ground rules you can be confident your comments and posts will be appropriate ones.

Abstain From Posting or Tweeting Certain Information

If you aren’t sure it’s acceptable to post a certain type of information on social media, it’s probably wise not to do so. For example, it’s best to use a personal mode of communication such as a phone call rather than social media to offer condolences after the death of a colleague or concerns about the illness of a coworker.

Curb Any Tendency to Over Share

It’s important to have a consistent presence on your chosen social networks but don’t over-share. Tweeting about six times a day is fine for Twitter but one post a day is enough for Facebook and LinkedIn.

Adhere to Offline Rules of Etiquette

Just because you’re communicating via the Twitter or Facebook platforms doesn’t mean you’re free to ignore certain protocols. Regardless of the mode of communication, readers will expect you to adhere to accepted rules of etiquette. So follow social norms, and you’ll avoid the negative outcomes of doing otherwise.

Unplug When Others Are Present

Important relationships deserve your undivided attention, so ‘unplug’ from technology during scheduled appointments with clients and colleagues. Doing so demonstrates your respect for these individuals and your willingness to make them your number one priority at a point in time.

Limit Your Posts to Items of Real Importance

A social network can provide quick updates on a project’s status and other topics of interest. That purpose is defeated if you post about trivial matters throughout the day. Make sure a post is something of value that will benefit your networks, such as a tip, a status, or a helpful link.

Carefully Select Your Audience Members

Be as discerning about the volume and type of information you disclose using social media as you would be in face-to-face communications. To do so, take time to become familiar with a platform’s basic functions, such as how to limit your audience for a particular message. Being oblivious to the number of people who can read a message doesn’t negate the possible damage that can result from indiscriminate tweets and posts.

Consider Who Might Be Interested in a Message

Having four or five hundred friends is impressive only if the people really are valued, business partners. So friend or tweet only those with whom you share common interests or relationships and who will have an interest in your message. When you limit your message recipients, you also limit possible responses to those you can somewhat anticipate. Refrain from ‘friending’ or ‘tweeting’ indiscriminately and you’ll preserve your social media account as the valuable asset it is, rather than a liability.

Carefully Choose Your Network and Recipients

Each social platform has a unique syntax and norms and each group is formed based on a particular shared interest. So don’t automatically send the same information – self-promotional or not – using Facebook, LinkedIn, Twitter, and other platforms. If you choose to share the same information with all networks, tailor the message for each network.

When it’s Time, Pull the Plug

Whether your audience will consider a post or comment an appropriate or inappropriate one will depend on its context. For example, in the midst of a project, team members are likely to be available and responsive to your messages. But once the project wraps up, a 24-7 news cycle is no longer required or appreciated as people will have new priorities and responsibilities.

Abstain From Posting Personal Information

With the creation of a social media account comes the possibility that your image as a professional will conflict with your image as a friend or family member. As a result, you might post a photo or comment that can harm your professional image. So balance your various roles and abstain from posting truly personal information.

Consider a Reader’s Response to a Message

Although some companies encourage an employee’s use of social media, it’s likely a business discourages disclosure of insider information that might negatively affect a brand. Before any post about your company, consider if the post will be helpful or harmful to your company or your standing within a company.

Issue Timely Responses to Inquiries

The more targeted the message, the shorter the acceptable response time. Consequently, companies may expect you to answer an email within 24 hours and a phone call much sooner. Because social media operates in an open forum, messages have a somewhat longer shelf life.

Social media offers a way to quickly and creatively connect with business partners who can be hard to reach. Unfortunately, these social platforms provide many opportunities to offend others in a variety of ways, including conveying extremely personal information in this very impersonal way. But you can avoid this and other faux pas by adhering to a few simple rules of social media etiquette.

21/05/2020
Social Media Etiquette: 9 more Quick Tips for Professionals

With social media, you can connect with business associates quickly and creatively. But this communication mode is not without risk. A thoughtless post can offend customers and other business partners and damage relationships rather than build them. By following a few ground rules you can be confident your comments and posts will be appropriate ones.

Check Your Messages for Grammar and Spelling

Your co-workers and business partners evaluate your communication skills so don’t send a message until you check it for grammar and spelling. This is easily done if you prepare your social media messages in a Word document before making them public.

Consider the Possibility that Your Message Might Offend Someone

Before you send a post, consider who has access to your profile and if it will matter to you that you shared this information with a certain person or business. If you cringe at the thought of your boss, client, or employee reading and sharing your message, it’s best to delete the message.

If You’re Feeling Needy, Disguise It

Refrain from asking Twitter followers to retweet a tweet or Facebook friends to like a page. Instead, make the effort necessary to find an enticing way to accomplish those tasks.

Share the Observations of Others

A key benefit of social media is that it grants immediate access to a diverse group of people willing to share their expertise. So share the posts and tweets of others, rather than limiting your content to your own commentary. In the process, give credit where credit is due by including their network handle and name in your message. Also, by sending a ‘thank you’ to those whose work you enjoy, you might create a valuable connection.

Ask May I Before Tagging

Because a photo is a flattering one of you, doesn’t mean it’s an equally flattering of others. So be considerate and don’t post photos and tag friends if the photos are ones the other subjects are unlikely to share with others. And never relay a conversation on your Facebook wall without asking the permission of all involved.

Limit Your Use of Hashtags

A hashtag is a way to group your tweets and posts of similar content so those in need of information about a particular topic can find it. But refrain from creating a hashtag for multiple words in a post.

Don’t Use the Automated Direct Message Tool – Ever

If it’s worth saying, it’s worth saying well to a specific person or group. So never send automated direct messages to anyone for any reason.

Be Transparent

If an issue arises that leads to a burst of activity on social platforms, don’t delete the comments and become defensive. Instead, post a thoughtful and informative response and work diligently to resolve the issue. When a solution is reached, post that information online.

Engage with your Readers

Encourage your readers to respond to your comments and posts by asking or answering a question and sharing relevant links. When they do so, reciprocate by ‘liking’ their posts or commenting on their tweets.

Social media offers a way to quickly and creatively connect with business partners who can be hard to reach. Unfortunately, these social platforms provide many opportunities to offend others in a variety of ways, including conveying extremely personal information in this very impersonal way. But you can avoid this and other faux pas by adhering to a few simple rules of social media etiquette.

21/05/2020
Do you share this habit with the world’s most successful business leaders?
What do Warren Buffet, Bill Gates, Mark Cuban, and Arianna Huffington have in common? All of these smart, savvy, successful business leaders share a passion for self-improvement through reading.

If you want to improve your skills as a business owner, why not spend a bit of time each day reading books that guide you to greater success?

This reading list of 4 inspiring business books will help you get started:
- “Thrive: The Third Metric to Redefining Success and Creating a Life of Well-being, Wisdom and Wonder” by Arianna Huffington
  President and Editor-in-chief of the Huffington Post Media Group, Huffington is the author of fourteen books including this best-selling guide to a more healthy and rewarding life. Drawing on the latest scientific research, she demonstrates how we all benefit personally and professionally when we forgo traditional measures of success in favour of more mindful living. Check out Huffington’s Ted Talk with simple advice on how to succeed.
- “Screw Business As Usual” by Richard Branson
  Founder of Virgin Group (which currently controls more than 400 companies), Richard Branson is also known for his philanthropic ideals. In this unusual business book Branson shares his unique vision for the future of business, arguing for a radical shift from a singular focus on profit to a more caring approach to decision-making that puts people, communities, and the planet first.
- “Winners and How They Succeed” by Alastair Campbell
  Selected by Richard Branson as one of his list of 70 must read books, this guide to what it takes to succeed was authored by Tony Blair’s chief spokesman and strategist. Based on in-depth interviews with successful athletes, entrepreneurs and global leaders, Campbell identifies four key traits shared by the world’s most successful people. Learn how you can cultivate a winning mindset and achieve your goals with Campbell’s blueprint for winning.
- “Persuasion: A New Approach to Changing Minds” by Arlene Dickinson
  Best known for her role as an investor on Canadian reality show Dragon’s Den, Arlene Dickinson started out in business as a 30 year old divorcee and single mom before becoming partner and CEO of Venture Communications. In her autobiographical rags to riches story she shares what she’s learned about success along the way—in particular, the lost art of communication in the digital age.
Final thoughts

It’s a well-known fact that Warren Buffet used to read between 600 and 1000 pages per day at the start of his investing career and still devotes 80% of his day to reading.

If you still need extra motivation to make daily reading a habit, consider the many benefits to your health and wellbeing.

In addition to helping you build a more successful business, reading has been shown to enhance empathy, confidence, and improve decision-making—and can help combat stress, depression, and dementia.
21/05/2020
Tips for writing effective performance reviews

Without knowing your break-even point, you can’t make informed business decisions.

The performance review has become a rite of passage in the business world, yet many managers and employees fail to make the most of the opportunities these important discussions can provide. When used properly, the annual review process can provide managers with real insight into everything from employee perception of the company to ways to make the firm better and more profitable. When not properly used, the annual review process is worse than useless – a waste of time and a way to foster resentment and bad feelings among the rank and file workers.

Whether the firm you work with has been using annual reviews for years or has just implemented such a policy, it is important to use the process to its full potential. While managers will need to adapt these ideas to meet the needs of their own companies and their own employees, there are some things all supervisors can do to make the reviews they give more useful to themselves, their workers and the companies they work for.

Concrete Goals

One of the most frequently cited sources of frustration on the part of workers is the lack of concrete goals. Many companies and individual managers set goals that are vague at best, making it difficult for employees to tell how they are doing.

That lack of specificity can be a real problem when annual review time rolls around. Without concrete goals that can be measured fairly, it is difficult for managers to assess each of their workers and assign proper grades for each area of responsibility.

Setting goals that are easy to identify is one of the smartest things managers can do to make the annual review process smoother and more productive. If the company you work for has not already established clear goals for your department, a talk with your own supervisor may be in order. Using that discussion to provide more concrete goals for your workers can help everyone and allow you to get more out of the annual review process.

More Than a Once a Year Discussion

Another problem with the annual review process is it takes place just once a year. Just think about how difficult it would be to manage your employees if you only had one discussion a year, and you will quickly grasp the inherent limitations of the annual review process.

If you want to make the most of the annual review process, you can use the goals identified at the last review to guide frequent discussions with each of your workers. These sessions do not have to be extensive, or even formal. They can consist of something as simple as a quick chat over lunch about an ongoing project, or a post-meeting discussion about an important goal for the company.

No matter what form these discussions take, they can be incorporated into the annual review process to make it more useful. The more you know about where each of your workers stands regarding previously identified goals, the more effective the annual review period will be when it finally arrives.

21/05/2020
Encouraging word of mouth
If you have any doubt that word of mouth referrals are important, consider these recent stats:
- According to Neilson, 92% of shoppers trust recommendations from friends and family more than traditional advertising
- 20% to 50% of consumer purchases are made because of a word of mouth recommendation
- 81% of buyers are influenced by their friends’ social media posts.
So how can you encourage positive word of mouth for your small business?

Try these three strategies.

Offer exceptional customer service—every time

There’s no way around it: positive word of mouth has to be earned.

Unfortunately, it is exceedingly difficult to prevent negative word of mouth. People are much more likely to share a bad experience than praise a business. (Research shows that 95% of consumers will pass on a negative run-in with a company and more than half will spread the word to at least five other people).

The best way to earn positive referrals is to make your customers feel special each and every time they come in contact with you and your brand.

Here are a few simple ways to win over your customers:
- Be friendly and approachable in person and online
- Get to know your customers personally
- Ensure customers are greeted promptly and don’t wait long to complete a transaction
- Express gratitude for ongoing business
- Offer perks for loyalty
- Pay attention to the details
- Be honest, always
- If something goes amiss, take immediate steps to resolve the problem to the customer’s satisfaction.
Invite—and reward—referrals

You can increase the odds that customers will spread the good word about your business with an incentive—such as a freebie or discount on their next purchase for completing a review on your website, Yelp, or Angie’s List.

Try an app like Wufoo to set up a simple referral form right on your website. Make it easy to pass on your e-newsletter to more potential customers with a web-based referral system that automates the process.

Don’t miss an opportunity

Remember to ask the folks who praise your products and customer service that you’d love a testimonial for your website, or a shout-out on social media.

On that note, it’s essential to keep track of what people are saying about your brand online—whether the talk is positive or negative. Be sure to take a moment to thank your fans for their kind words. As an added bonus, replying to positive business reviews can help give them a bump in search results.

Be sure to respond appropriately to negative reviews, too. Consider a bad review an opportunity to make things right. It’s much better to know what people are saying and respond than allow a problem to fester.

Check out this article for useful tips on the right way to respond to positive and negative reviews.

Final thoughts

As you make efforts to increase word of mouth for your business, remember this: it’s the element of surprise that really gets people talking about a company. Think about how you can do more than meet your customers’ expectations, but dramatically exceed them. They’ll not only tell their friends about you—they’ll keep coming back for more.
21/05/2020
Growing your business without borrowing
Taking out a business loan may be your first plan of action for financing business growth. But there are excellent reasons to consider other options for finding capital to expand your business.

For one, it can be very difficult for a small business to secure financing, especially in the early days. You’ll need to prove to a lender that you aren’t a high risk, with financial documentation that shows your company has been profitable for a few years.

When you take out a loan you’ll need to consistently make payments toward the principal, interest, or both, depending on your agreement. If for some reason you can’t make your payments, the problem can snowball from losing the assets you pledged as collateral to more devastating losses, including bankruptcy.

Consider these four ways to finance growth without approaching a lender for money.

Ask for pre-payment

This option is as simple as asking your customers to pay you in advance of receiving your products or services. Explain that you are changing your payment policies and your new terms are that you receive payment on the first of the month, at the beginning of a project—whatever works for you. As the owner of your business, you get to decide when and how much you need to be paid in order to deliver your products and services.

On a related note, you might consider using a subscription model for a new income stream. Some possible subscription-based services with a recurring pre-paid fee are:
- a password-protected website offering valuable info and community for your customers
- a monthly service membership website (i.e. beauty, dry cleaning, home maintenance)
- box kits for DIY enthusiasts (i.e. cooking, crafting, and other hobbyists)
Try Crowdfunding

Crowdfunding campaigns connect individuals with a community of willing donors via a platform such as Kickstarter, Fundable, or Indiegogo in exchange for some reward.

In addition to providing an inexpensive source of financing, crowdfunding allows entrepreneurs to gain market validation for a new idea before overinvesting—and provides an opportunity to market to potential new customers. You’ll be able to start selling before your new product or service is ready so you can continue to avoid the small business debt trap.

Form an alliance
Partnering with other businesses is mutually beneficial: each company can increase its sales by introducing each other’s products and services to its own customers at no added cost. You can potentially attract brand new customers, too, by increasing your range of offerings by way of your alliance.

Likewise, a marketing alliance is a simple strategy where two companies agree to spread the word about each other’s products and services with their customers. Each partner would earn royalties on sales to the other partner’s customers, bringing in easy growth revenue without any additional marketing or advertising costs.

Final thoughts

As you move forward with your next phase of business growth—no matter how you fund it—be sure to touch base with a business advisor. Seeking the guidance of experienced business experts who can help you update your business plans, and choose the best strategies to cut costs, increase profits, and achieve your short and long-term goals, will lead to greater success.
21/05/2020