First-rate customer service truly stands out

Aug. 22, 2009, 1:48AM

Q: I know that businesses that provide good customer service usually have more repeat business and therefore greater sales than those that don't, but how do you go about doing that?

A: It's the businesses that personalize their customer service that gain the most customers who come back.

Linda Novey-White, former SCORE board director and international hospitality consultant, says: “Never let your client forget who you are. You want to use every method possible to keep yourself in the front of their minds.”

One way is to send a news clip that you think might be of interest to the client, even if you don't have a current contract with that customer. The next time the client needs some work, you may get a call. Another way is to write thank-you notes once a job is done. Handwritten notes stand out from the crowd. It can pay off.

Make it your business to find out your customers' special occasions and send cards or flowers to let them know that you care. Your competition may have a product that is similar to yours, but with personalized customer service, you can distinguish your company.

You need to give your customers something of extra value if you want them to return, Novey-White says.

Try giving them more than they paid for. If you have a product to sell, customers should perceive that it has a greater value than the products offered by your nearest rival. Look at your business like a customer would. What could you be doing better and what is your competition doing better?

It's not enough to meet your customer's needs. You have to anticipate them. Think ahead to what the market is going to be demanding next year and determine what you can do better a year from now. Businesses usually proudly state that their core concept is to exceed expectations, but they neglect the founda-tion of meeting those expec-tations in the first place.

Novey-White says the two top mistakes people make in customer service are not delivering and not listening.

First, deliver what you promise. Delivering a product or service that disappoints is the fastest way to lose your customers.

Second, remember to listen. Too many businesses advertise the next big thing without considering whether their customers want a next big thing. Your customers will tell you what they really want — if you really listen.

Why buy a failing business?

Aug. 8, 2009, 1:41AM

Q: A friend has suggested that we consider buying a business that is failing. Why would we ever want to do that?

A: A failing business might present an attractive investment opportunity for any number of reasons. When businesses for sale are failing, i.e., they have low or negative cash flow to the owner, you need to look under the cover to see what's really going on in the business.

The reasons the business is struggling could be correctable by the right buyer. And, if that's the case, you need to make sure that what you are buying, with the necessary adjustments, will fit into a business plan that you believe will be successful.

Actually, the evaluation you should conduct is not much different than if you were considering buying a business that is profitable. You may find that the strong earnings of a successful business are based on factors that are temporary or depend on skills that you don't have or are difficult to acquire.

A business may be failing because of owner mismanagement. Perhaps the owner doesn't have the marketing skills needed to boost sales or maybe is not managing inventory in a cost-effective way.This could create an opportunity for a motivated buyer with the capability to properly manage the business.

The owner may just be burned out and may not have the energy to make the adjustments needed to improve the business.

For instance, an owner I visited recently has been running his business for a long time. His market has changed, but he doesn't want to make the investment in time and money to advertise and take orders over the Internet even though the rest of his business infrastructure will support this. Again, this could be a good opportunity for the right buyer.

Sometimes early-stage businesses fail because they run out of cash and can‘t raise more capital. This can happen even though their sales volume is growing nicely and can reasonably be expected to continue to grow. But a seller may have a long-term lease or a loan payment that he or she can't support any longer.

A buyer with the financial resources and the know-how can treat the business as a startup but with a head start, thereby avoiding many of the headaches entrepreneurs normally encounter when starting from scratch.

Of course, your evaluation may discover that a business is failing for reasons that can't be easily resolved. In this case, you just keep looking for that good investment opportunity. There are many of them out there.

Work hard but get a life

July 25, 2009, 5:24PM

Q: I've been out of work for a while and am thinking about starting or buying my own business. Other than preparing a good business plan and securing financing, what other major challenges will I face?

A: Entrepreneurs often face obstacles that can impede if not block progress on getting started in their new endeavors. These are often more personal than business-related.

Time mis-management is one of those issues that create problems for many who start new business ventures. Either you spend all of your time working, or you can't quite keep yourself on a schedule.

Many businesses fail early because the owner couldn't draw a good balance between work time vs. “the rest of life” time.

While you need to be prepared to spend a lot of time on your business, especially early on, you can't spend every waking minute on your business. You still need to have a life. Otherwise you'll burn out.

If you have organizational skills, you've just passed the next major hurdle. Being disorganized not only means wasting your time as you try to find or do something, you waste the time of others whose assistance you may be depending upon. Being unorganized also makes focus difficult, which leads to the next obstacle — focus or rather “lack of” focus.

A SCORE client of mine decided to resign from his company and focus on consulting. Seemed like a good idea. He knew his field and had a lot of hands-on experience. He also had a fully equipped home office and no kids or spouse around for distraction.

Unfortunately, the idea was better than the venture. He couldn't focus without the structure of an office environment. Instead of being at his desk every morning at a certain time, he'd find other things to do. Lunch hours often turned into taking the afternoon off. It was a “sort of” business — not a serious one.

Also, you need to be able to deal with the fear of failure. Failure and entrepreneurship go hand-in-hand. If you're not fully aware that your business could fail — or if you're terrified of failure — go work for someone else.

If you're not willing to take risks, you shouldn't be in business for yourself. Most successful entrepreneurs have had failures along the way — either companies that didn't succeed or ideas that failed. But that didn't stop them from starting again.

Brand needs clear edge in bad times

July 11, 2009, 3:58PM

Q: Is it worth continuing to build your brand in a difficult economic climate?

A: Studies have shown that companies that have high brand awareness achieve returns far greater than companies that don't. Taking an active approach to marketing and branding is vital, especially during a tight economy. Spending a lot isn't the key to marketing and branding. Instead, focus on your audience and provide qual-ity, quality and quality in everything you do.

Do what you say you're going to do. This may sound like common sense, but one of the primary drivers of brand loyalty is a consistent experience.

If you say you are going to have the product ready or the service delivered on a set day, be sure it is ready. Positive experiences lead to good feelings, which lead to customers telling their friends. Don't forget that bad experiences spread faster and are harder to overcome — if you get a chance at all.

The first key to successful brand building is to clearly define your brand. If you haven't yet, draft a one-page description of your business.

It helps to get an outside perspective; ask people who interact with your company about their perceptions. How would they describe your business? What do they think you do? What do they like about it? How do you compare to rivals? Could your company improve?

Then, write down what your business stands for.

Examine every component of your brand — for example, your logo, business cards, signage, Web site, on-hold messaging and e-mail signature — and make sure they are consistent with your desired image.

Your employees are important stewards of your brand. Branding is as much about your people as anything else. The best interactions come from one-on-one conversations among managers, employees, suppliers and customers. Employees engaged with your brand philosophy will become brand ambassadors.

A down economy is the time to reaffirm your value proposition with your customers and prospects. Keep your company and brand at the top of their minds. The economy will turn around, and you want to be the first choice when they're ready to buy.

Because branding is a long-term effort, it may take months before a small business will see results.

Don't abandon that effort, even when times are tough. This way, you'll be ready when the economy rebounds, and consumers will remember you were there.

Some ideas on coping in bad times

June 27, 2009, 1:17AM

Q: What are good ways to stimulate sales when the economy is down?

A: First and foremost, stay calm and don’t panic. Recessions and economic downturns have occurred before. Prepare now to position yourself and your business to benefit from the eventual and inevitable climb back to success.

It’s time to be creative in your sales and marketing efforts. Remember two old clichés, “step out of the box” and “don’t be vanilla.” Now is the time to maximize your sales and marketing effort. Don’t sit back and wait.

Start with obvious fundamentals. Contact all past and present customers as soon as possible. Be enthusiastic. An example would be, “We’re overstocked on items you’ve bought previously.” Offer significant incentives and/or “preferred customer” discounts on everything, including the highest-turnover items.

Liquidate old and slow-moving inventory at cost or less. If you provide a service, create a package offering a “special series,” or an evening and weekend rate. Don’t forget ladies’ day, senior citizens’ day, holiday specials and incentives to pay now. Think cash. Cash is always king, especially in recessionary times.

Revise your marketing and business plan to position yourself for long-term success. What are you good at? Set realistic goals and measure progress often. Review your product line or the services you offer. Can you profitably market to a slightly different customer group? Don’t forget customer service with this definition: An unexpected service when delivered at random, can create a memorable event for your customer. Make use of sincere thank you’s. Follow up. Then, follow up again.

Valuable tools are available today that didn’t exist during previous downturns. Technology has given you the Internet, e-mail marketing and search engines. What about cell phones and text messages? Professional networking sites such as Linkedin, Facebook, and Twitter can create new contacts and new sales opportunities.

Maximize utilization of inexpensive items like press releases, trade shows, speaking opportunities and e-mail marketing. Network at chamber of commerce events and other “mixers.” Offer to provide a door prize in order to get exposure. Investigate business networking groups. Don’t forget to read industry trade journals and newsletters and visit appropriate Web sites for fresh ideas. Finally, clean up your Web site and make sure it’s user-friendly.

Plans need frequent evaluation

June 13, 2009, 3:23AM

Q:In your most recent column you provided advice on where to find resources to prepare a good business plan. Now that I have one and have started up, what do I do with the plan?

A:You’ve put a lot of time and effort into your business plan. Think of it as a living document, and refer to it and review it often. Use your business plan as a tracking and evaluation tool, so that you can determine if your business is heading in the right direction or if it has wandered off course.

Schedule periodic checkups of your business. Many factors that affect your business are tied to an annual cycle. To ensure that your business plan continues to serve you well, make it a habit to update it annually. Set aside a block of time near the beginning of the calendar year, fiscal year or whenever is convenient.

Make this review a priority activity. Often small-business owners allow their time to get absorbed on the more urgent operational tasks and don’t allow time for vitally important management and planning activities.

Validate the assumptions used in your plan. Our business environment is always changing, so ensure that the basesused for your plan are still appropriate.

Assess your performance by reviewing the data in your plan. Compare your expected results against your actual results. Because your plan sets forth marketing, operational and financial milestones, you should carefully analyze actual operating results against the goals and objectives.

Fine-tune your plan. Parts of your business plan may feel very tight and others may still need some work. Look for ways to improve what you’ve done so far. Incorporate the experience you’ve gained as a business owner into your business plan. Anticipate future events — good and bad — that may affect your business. Take appropriate action if goals outlined in your plan haven’t been met.

Get help from others. After you change and update your business plan, share it with your advisers. SCORE, Counselors to America’s Small Business, is experienced in helping entrepreneurs create and revise business plans.

Strive to operate your business according to your plan. Your business plan will work for you if you use it to remind yourself and your team where you are going and how you will get there.

Whether you’re updating your business plan for the first time or the 20th, treating your business plan as a document that evolves over time proves that you understand your business and you know what is required to make it grow and prosper.

Business plan help is easy to find

May 30, 2009, 5:24PM

Q: The process of writing a business plan is daunting to me. How do I get started?

A: When this happens to aspiring entrepreneurs, the obstacle is often just knowing what information is needed and where to find it, and then actually putting it down on paper.

For starters, you’re not venturing into unknown territory. Millions of people have transformed their ideas into thriving enterprises. Putting together a business plan is a valuable learning experience, an opportunity to learn about your chosen new field, and yourself. The proverbial first step of this journey is relatively easy.

Many valuable resources are available that can guide you through the process from start to finish. These aids can’t do all the work for you. You still will need to invest a fair amount of time and effort in research, writing, revising and more research.

But once you do get started, you may well find yourself wondering why you waited so long.

To get a complete picture of how a business plan is structured, visit the Small Business Administration’s Web site, www.sba.gov/smallbusinessplanner. The pages outline the elements found in most business plans and provide a wide range of sample plans for various types of businesses.

The SBA’s basics page also offers helpful guides to financing, marketing, employee relations, taxes and other topics that entrepreneurs should consider as they shape their business plans and strategies. At SCORE’s Web site, www.scorehouston.org (click on free business resources), you’ll find many valuable tools and other information. Download the easy-to-follow templates directly to your computer and get started.

Each section of the business plan templates explains the type of information that’s needed, why it’s essential to the plan, and the questions you will need to answer when seeking financing.

Remember, however, that while these tools can provide a good start, they are by no means all-inclusive and you may need more guidance from experienced business counselors.

Take advantage of free and confidential business counseling at one of SCORE’s several Houston area locations or attend one of SCORE’s workshops or seminars on business planning. If the nature of your business or industry requires considering specific issues, go to www.score.org and request online assistance.

Credit crunch for small businesses may be easing

May 2, 2009, 5:23PM

Q: Is there any help on the way to encourage lending to small businesses including startups and acquisitions?

A: The American Recovery and Reinvestment Act passed by Congress in mid-February has a number of provisions to enhance the Small Business Administration’s loan programs, and three have already been implemented.

The first deals with the SBA’s 7(a) loan program, which guarantees a portion of bank loans to entrepreneurs looking to start, expand or acquire small businesses. The 7(a) serves as a credit enhancement to the lender and provides collateral to the borrower. Most 7(a) loan program guarantees are temporarily raised to 90 percent of the portion of the loan being insured against default through 2009 or until the funds are exhausted.

The increase in guarantee levels will help banks extend credit and make more capital available to small-business owners around the country.

The act also temporarily waives the guarantee fees passed on to borrowers on 7(a) loans.

On Friday, the SBA temporarily increased the 7(a) loan size standard making more businesses eligible for 7(a) loans. Also , the fees paid by borrowers in the SBA’s 504 loan program are temporarily waived.

This program provides SBA financing for long-term fixed assets such as land, buildings (occupied by the borrower) and substantial machinery and equipment.

Through the SBA’s Surety Bond Guarantee program, the SBA guarantees bid, payment and performance bonds that protect a project owner against financial loss if contractors default or fail to perform. The maximum amount for contracts that qualify for SBA surety bonds has been raised to $5 million or $10 million depending on the type of contract.

The Recovery Act also expands the SBA’s Microloan program, which provides loans up to $35,000 through participating microlenders. These are paired with technical assistance to startup or growing small businesses.

The director of the SBA Houston District, Manuel Gonzalez, says, “In our district, we have seen an increase in 7(a) loan volume of approximately 50 percent over the period just prior to passing the Recovery Act.”

Starting a business? Pick one that blooms in recession

March 28, 2009, 2:37AM

Q: I would like to start or buy a small business, but the economic news these days is so depressing that I’m wondering if there are any good opportunities in today’s environment. Do you know of any?

A: There are many small businesses in Houston that are doing quite well despite the economic slowdown we face. Some are types of businesses in markets that are weathering the storm better than most. Others have acted aggressively to stimulate sales, have adjusted their product or service mix in response to changing customer needs, or have increased their efficiency to improve their bottom line.

For example, when the conventional wisdom was to trim down and scrutinize costs, Veronica Millstid-Levine, the owner-manager of Bailey Connor Catering, hired a marketing consultant and additional salesperson to root out more customers.

It paid off with a 21 percent increase in sales in 2008, and the company is on course for a greater increase in 2009.

“Auto repair is an example of a sought-after business in these recessionary times,” said Rose Stabler, Managing Partner of Certified Business Brokers.

“With the car dealerships going out of business and their repair shops along with them, there will be more people looking for private auto repair shops. In addition, more people are keeping their cars instead of buying new ones. Therefore, more repairs!” Stabler said.

One of Stabler’s current listings for sale in Houston boosted its earnings last year by 65 percent by providing superior auto service to its local customers.

Debbie Beal, owner-manager of A2Z Educational Supplies in Humble, worked with SCORE business counselor Bob Galbreath.

She emphasizes quality service to her customers, who are mostly schools and teachers.

Her sales increased by 28 percent last year, despite Ike, and are showing about a 40 percent increase year-over-year in 2009.

Vic Bailey of One Voice, a business communication services company, has maintained his sales volume by “hitting the streets” and paying visits to current clients and potential clients.

Improved telecommunications is one way his clients can increase productivity.

So he proactively gets out there to advise them on those improvements.

Marketing your small business successfully

March 13, 2009, 9:50PM

Q: I work independently, performing services or doing projects for clients. What advice do you have for finding freelance work that keeps the revenue coming in?

 

A: When you’re a freelancer or solo independent contractor, you are your own marketing department. It’s up to you to make the contacts and generate the work that will enable you to expand your business.

Freelance newcomers and veterans alike need to continually broaden and update their work-finding and marketing skills, not only to sustain their current workloads, but also to stay ahead of the competition.

Two keys to being successful at this are consistency and dedication. The search for work is a constant part of your independent enterprise, so you’ll enjoy it more if you develop a passion for finding the next big project.

The best source of new business is current customers. Doing good work for them will keep them coming back, which is why you also need to be a stickler for client satisfaction. Always stand behind your work and try to exceed client expectations.

It’s also important to stay in touch with your clients, even if you already have a substantial backlog of work. Check in periodically to ask how things are going, what projects or initiatives may be in the works, and remind them that you’re ready to help out if the need arises. They’ll appreciate your proactive interest, and planting that seed may pay off immediately or in several months when things start to slow down on your end.

Also recognize that building your personal brand is important. As a sole operator, your brand is you, so focus on leveraging your special knowledge, style or expertise. But don’t lock yourself in too tightly. The most successful independent contractors try to build new skills and leverage existing ones to higher price levels.

A substantial number of Web sites specialize in matching freelancers with potential clients. Their approaches are as varied as the range of industries they cover. Some work on a bid system where employers post projects and freelancers bid on the work. These sites will likely take a cut of your proceeds.

Then there are job boards, where projects are posted and you respond with a pitch letter and ré sumé directly to the employer. You may need to pay a fee to access these resources, so it’s a good idea to find out whether the amount of work or contacts generated are worth the investment.

Chambers give a range of help to small businesses

Feb. 27, 2009, 11:50PM

Q. I read your recent article on networking and how to interact with potential business contacts. Are chambers of commerce good places to network and worthwhile to join?

A. Chambers offer companies a range of resources to support, develop and grow their businesses as well as the local economy. From regulatory and legislative issues to enhancement of the business environment of your community, the chambers of our region are quite often at the forefront of positive change.

With chamber membership, a small investment in time and dollars can help contribute to your marketing, public relations, networking and team-building efforts.

Chamber membership expands your information and networking resources dramatically. Networking with other businesspeople gives chamber members the opportunity to meet and exchange information with each other.

“Contributing to chamber of commerce community activities brings visibility to your business as a good corporate citizen,” says Ann Hodge, CEO of the Katy Area Chamber of Commerce.

The chambers’ involvement in local charities, community cleanups, crime prevention programs and more give your business an opportunity to participate in positive changes in your community, often at minimal cost.

Powerful endorsements

“Area chambers are proud to recognize and reward this activity,” Hodge said. A company’s efforts are often lauded for months by other businesses, the community and elected officials. These accolades and respect from other local businesses serve as powerful endorsements and publicity for any company.

Are you concerned about the regulatory climate in your area and want to assume a role toward effective change? Your local chamber is the voice of business in a myriad of issues.

The chambers work to influence the agendas of city, state and national elected officials, keeping the interests of our local businesses in front of decision makers.

In addition to numerous networking events and other resources, most chambers offer educational and business counseling services to help their members resolve issues and improve their businesses.

For instance, SCORE provides free and confidential counseling as members of the Katy Area, Houston Northwest and Houston West chambers of commerce.

Get help coping with the recession

Feb. 14, 2009, 12:34AM

Q: The economic slowdown is starting to hurt my small business. How can I get ideas and assistance for coping with the challenges that small businesses face today?

A: Small businesses shouldn’t have to face the recession alone. And in Houston, they don’t have to.

Capital One Bank and SCORE have formed the Small Business Development Alliance. Its aim is to help Houston-area small businesses survive and succeed during the tough times. Small-business owners are invited to attend free seminar and networking events planned throughout the year.

At these events, you will take home coping strategies for tough times, meet with lenders of alternative financing, network with other small businesses and enjoy a free lunch.

“We recognize the important role small businesses play in stimulating our economy and rebuilding our communities and the determination it takes to open your own business,” said Laurie Vignaud, a senior vice president at Capital One bank.

At the events, you’ll have the opportunity to meet one-on-one to discuss your situation with SCORE counselors, Capital One bankers and their strategic partners:

• SCORE SMART squad members will explain how they can work with you at your location to help resolve business issues.

• The Small Business Administration will explain the SBA Loan Guarantee programs.
• Acción Texas provides credit to small businesses that do not have access to loans from commercial sources.
• Houston Business Development can provide low-interest-rate loans
and an array of support services and management assistance.
• The Houston Minority Business Council actively involves its members to increase and expand business opportunities and business growth for minority business enterprises.
• The city of Houston One Stop Business Center provides information on city, county, state and federal regulations affecting your business.

The next seminar is at the Church At Bethel’s Family, 14442 Fonmeadow Drive, in Houston next Saturday from 9 a.m. to 3 p.m. and includes a free lunch. Visit www.scorehouston.org to register and see the schedule and locations of the other free seminars.

Network your way to success

Jan. 31, 2009, 12:03AM

Q. I’ve been told that I need to network more in order to expand my small business, but I’m not very good at it. How does one go about networking?

A. Networking is the process of connecting with people so you may help others and they may help you. The interactions established through effective networking build over time and can make a difference in the amount of business your company generates.

Networking doesn’t come naturally to a lot of people. Many are uncomfortable with starting a conversation with someone they don’t know. Others are concerned it won’t be worth their time.

Successful networking is more than simply exchanging introductions and business cards and then waiting for someone to call.

Donna Fisher, a networking author and speaker, says you should focus on people as they are introduced to you, so that you remember who they are.

Also, don’t waste the few precious moments you have with contacts by focusing on yourself. It’s better to spend most of that time asking questions so you can assess whether or how to follow up.

Fisher’s easy-to-read book Power Networking, which she co-authored with Sandy Vilas, identifies 59 secrets to building powerful networks.

Here are a few.

When introducing yourself, you need to make your company sound spectacular in seven to 10 seconds, Fisher says. Your introduction needs to be “clear, concise and personable to attract people’s attention, generate inquiry and be remembered.”

Look professional and always carry your business card. After all, who knows where or when you’ll meet a fantastic contact. “Treat the act of giving someone your card with respect, and the recipient will also treat the card, interaction and follow-up with respect,” Fisher says.

Give referrals whenever possible. The best networkers believe in the “givers gain” philosophy. In other words, If you don’t attempt to help the people you meet, then you are not networking effectively. If you can’t give someone a bona fide referral, try to offer information that might be of interest to them, such as details about an event. Write notes on the backs of business cards you collect to help remember each person.

You can do all of the above religiously, but if you don’t follow up effectively, you will have wasted your time. Call each person you’ve met. Be sure to fulfill promises.

Putting a value on your business can be crucial

Jan. 17, 2009, 2:19AM

A: Too often, business owners brush aside valuations, believing them necessary only if they decide to sell. There are many other reasons to value your business. Perhaps you’re thinking about taking on a partner, or a partner is leaving the business.

Other reasons for business valuations could include applying for an expansion loan, spin-offs, disputing an IRS audit, major strategic planning initiatives, estate or gift planning, and divorce. Or how about this: You might simply want to know how your investment is doing.

Going through the valuation process can help you learn about those things that increase the value of your business.

You can determine the value of a business in many ways, from quick and cheap software-based calculations you do yourself, to full-scale, certified valuations by professional appraisers.

You can determine the value of a business in many ways, from quick and cheap software-based calculations you do yourself, to full-scale, certified valuations by professional appraisers.

The price range can vary from as little as $15 for the simplest software, to thousands for a detailed analysis performed by certified professionals for midsize businesses. Business brokers, hoping to sell your business, may even do valuations for free.

None of the many valuation procedures is perfect. Most valuations are based on an analysis of forecasted cash flow that produces a present value for the business. Also, there are accepted rules of thumb for all kinds of small businesses, in all types of industries.

Bankers and investors, as well as the IRS, are generally skeptical about rules of thumb. You can expect both groups to require a valuation whenever a company seeks either a significant increase in credit or a new infusion of equity capital.

Professional appraisers analyze all kinds of information, such as historical financial records, cash-flow forecasts, customer base, internal controls, key employees, competitive details and much more.

Professional appraisers analyze all kinds of information, such as historical financial records, cash-flow forecasts, customer base, internal controls, key employees, competitive details and much more.

Try to match the person or method you use for a valuation with the reason you are doing it. So, if the valuation is for a loan, look for someone who’s done them for that purpose.

The American Society of Appraisers offers a free service online to help you find a business valuation expert in your area. Look for the Find an Appraisal Expert link at www.appraisers.org.