Posts Tagged ‘small business advice’
Managing Your Debtors – Some Friendly Small Business Advice
Accountants in Manchester – Small Business Advice
Not all business transactions are cash and carry, so properly managing your debtors is an important skill for any business owner. Debtors, clients and customers who owe you money, become accounts receivable in terms of your books. Keeping track of who owes what and when it’s due can play a big role in financial statements, income reports, and profit and loss projections. While revenues have yet to be realized, the sales have, and should be recorded appropriately. However, debtors are not just accounts in your books, they are your customers too. It takes attention to detail and good business acumen to balance both sides – the customer and the account.
The first rule for managing your debtors is to set policies you can live with in terms of cash flow. Do not offer net 90 terms if you cannot afford to wait 90 days for the customer’s payment. Granted, you must also consider market practices in your area, as these may dictate what customers expect as far as payment terms. However, your business belongs to you, it is up to you to make sure you set policies and terms that allow your business to operate efficiently and profitably.
As for extending credit and managing accounts receivable, most customers will pay their debts. Many will pay their debts on time or early. Unfortunately, some will drag their feet for reasons of either neglect or their own cash flow difficulties. It is tempting when your favorite customer complains of economic woes to offer an extension, however this is not the best way to manage your debtors. While allowing a good customer a little leeway during tough times can be beneficial and promote good will with clients, going too far with payment extensions damages your ability to remain afloat.
As a rule, do not offer extensions on payment terms. This will allow you the positive cash flow you will need so that when a good customer does need a little understanding, you will be in a position to be flexible without hurting yourself. Managing your debtors takes a warm, friendly approach to customer service, but a firm, sensible approach to accounts receivable. In short, set payment terms that work for your cash flow needs, be firm in your expectations of payment, but do not be so inflexible that you create ill will with customers. Balance these three tips, and your accounts receivable records, as well as your financial statements and customer loyalty will remain healthy and profitable.
Business to Business Selling Skills: Don’t try and force a “No” into a “Yes”
Accountants in Manchester – Small Business Advice
There are a number of individuals who view sales as a series of repeated catch phrases that somehow, magically force customers to purchase. The “say anything, do anything” approach to sales may allow you to close one or two orders. However, once your customer realizes they’ve purchased something they weren’t entirely happy with, you’ll lose their repeat business. This is especially true if they feel you’ve led them astray.
Don’t try and force a “no” into a “yes”. Instead, understand why the answer is “no” and then move forward.
Contrary to popular opinion, there is no magical way to get past a “no”. The doctrine of turning a “no” into a “yes” is both outdated and antiquated. If you really push and push, you’ll likely be able to close an order even though someone has said “no”. However, it’s the wrong approach. This doesn’t mean you simply give up. You should always try and alleviate a customer’s concerns. Doing so might just lead you to winning new business. What it does mean, is that there are plenty of sales people who are simply satisfied with getting the one sale, without considering the long term consequences of an unhappy customer. Several sales people have taken the “no” to “yes” approach, and used it to convince someone to purchase something they simply didn’t need. The real intention is to answer all the reasons why your customer might not order, and then hopefully give the customer the confidence to purchase. Understand why someone may not want to order, and address these concerns first. Only after you’ve addressed all their concerns, and both you and your customer are confident you’ve found the solution, should you then move forward.
Using catch phrases, and other sales tricks, to slip one past a customer may get you that one order, but will never allow you to grow repeat business. It’s simply no way to create a long standing and lasting business relationship.
Best Small Business Practices: Driving Ideas and Innovation From Within
Accountants in Manchester – Small Business Advice – Company Culture
Continuous improvement is a necessity in today’s constantly changing business environment. Business as usual will no longer suffice. While your competitors may be on the other side of the world, they are but a few clicks on a keyboard away from your customers. If they enjoy a competitive advantage, you will lose business. Staying one step ahead of your competitors is a prerequisite to remaining viable and strong in the face of increased competition. Constant change and continuous improvement in your organization drives improved efficiencies, reduces costs, and ensures your adoption of change matches your message to market. In reality, you simply can’t be open to change for your customer’s benefit, if your internal processes don’t encourage and accept change. This drive for change can come from an extremely inexpensive resource, if, and only if, your organisation is open and willing to use it. For many companies that resource is most often underutilized. So, where can you get a relatively cheap source of information that can help drive change within your organization, improve efficiencies and drive down costs? The answer is a simple one. Your employees are that source, and true to form, they are your organisation’s greatest asset. Using them, and allowing them to come forward with solutions, is simply a decision.
Innovative ideas means more in depth search for information to support those ideas. You need to drive ideas and innovation within your company, and demand the necessary information needed to support the ideas in order to see them to their successful conclusion. Facilitating an environment where employees can come forward with well researched ideas, will provide the impetus for change and continuous improvement that the company needs to succeed. Understanding the importance of change, what are some of the ways to encourage innovation? More importantly, how can you be sure your employees feel empowered to come forward?
Is the company culture inclusive, or exclusive?
What is the company culture? Do employees feel they can come forward with suggestions, or do they remain silent for fear of reprisal, or refusal of their ideas? The fact is, depending upon where, and who someone works for, their opinions of the company culture will vary accordingly. Some employees may feel empowered to come forward in one department, while others may feel completely shut out from being able to express ideas and concerns, in another. Unfortunately, perception is truly 100% reality. There are bound to be employees who are encouraged to come forward, and others who feel unwelcomed. It’s up to management to look throughout the entire organization in order to get a true feeling of what the overall company culture is. Every employee must be encouraged to come forward. Every employee must feel their ideas are worthy of discussion. The importance of the entire company affording opportunities to everyone, regardless of department or title, is that improvements need to be driven from every area of the business. Improvements in one area, can cause delays and problems in other areas, if those that work in these areas aren’t allowed to come forward with suggestions of their own.
A Basic Introduction to Strategic Partnerships
Accountants in Manchester – Small Business Advice – Strategic Partnerships
It seems like everyone in business these days uses euphemisms and catchy phrases to describe what can actually be complex business relationships. You’ll often hear people throw around terms without completely understanding the real meaning of the term itself. For instance, people like to refer to their vendors and suppliers as strategic partners, when in fact, they are nothing more than just a vendor. There is much more involved in strategic partnerships than just agreeing to purchase a product or service. If that were the case, then anytime you bought anything, you could always just say you bought it from your strategic partner. Strategic partnerships extend well beyond the typical boundaries of what would normally be considered just another business relationship. They are the ultimate alliance between two business enterprises whose collaborative efforts and specialties allow both to benefit from each others strengths. The goal is for both enterprises to provide each other with incentives to grow from their collective efforts. It goes well beyond the typical buyer and seller relationship. In a number of cases, trade secrets, ideas, development, business know how, and labour costs can be shared in order to ensure the partnership is a successful one. Because so much is shared, both companies must enter into extensive negotiation to ensure each is aware of their respective liabilities and responsibilities.
These partnerships involve extensive negotiation and legal ramifications.
Because of the nature of these relationships, they tend to involve extensive negotiation. Often partners will share product development, marketing, product branding, and advertising expenses. Because of the nature of these partnerships, precautions must be taken to protect each company’s rights as they pertain to employees, profits through the partnership, and intellectual property. They are the ultimate combination of each company’s greatest attributes. They share a common goal of increasing market share through the partnership. With all the legal consequences and intense negotiation, does this mean that strategic partnerships are the domain of the big corporations, or can smaller enterprises benefit from these collaborative partnerships?
Any company, any size, can pursue a strategic partnership.
Contrary to popular opinion, any two companies, regardless of their size, can enter into a strategic partnership. However, when doing so it’s extremely important for both parties to outline the responsibilities and liabilities for both, and that neither allow the other to try and hire away employees. Nothing should ever be left to interpretation, and both parties must never allow verbal agreements to take precedence over written ones. If these conditions are respected, then both parties can be properly protected if the relationship dissolves. In fact, a number of strategic partnerships start when two smaller companies combine their strengths, and ride the wave of growth together. Therefore, if you are a small or medium size business owner, or entrepreneur, and feel you would benefit from such a relationship, then you can simply concentrate on some of the key essentials of the strategic partnership. In doing so, approach the partnership from the perspective of a supplier trying to sell more products to a customer.
3 Keys to a Successful Small Business – Prepare, Begin, Manage
Accountants in Manchester – Small Business Advisors
Starting up your own small business requires a great deal of planning, learning, and exploration of available options. By following these 3 essential keys to a successful small business, you may well be on your way to financial growth and prosperity.
Prepare
Preparation is crucial to effectively establishing and developing a profitable business. A drafted plan to commencing and operating your own business effectively and efficiently is fundamental. Developing an outlined plan should help expand lending options, encourage development, and also give you a guide to adhere to. As soon as your business is launched and established, it is important to frequently evaluate and revise your strategy to address expansion and development of your business.
Begin
Beginning a business calls for a variety of actions, requiring you to address several key factors. You will need to choose a location, determine a company framework, and acquire the required permits and licenses. Furthermore, you will need to analyze which financial options will satisfy your immediate short-term demands, as well as your long-term goals and objectives. It will also be necessary to familiarize yourself with trademark and copyright issues that might be associated with your particular business. Far too many businesses have great ideas, plan out those ideas, as detailed above, only to never take action. Furthermore, to actually begin your business you are going to have to accept an element of risk that unfortunately comes with the territory.
Manage
Effectively managing a business calls for distinct management abilities as well as an understanding of important industry practices. It is important to examine management characteristics, decision-making techniques, and ways in which to regulate your staff members. Additionally, you should familiarize yourself with important business management practices such as marketing and advertising fundamentals, legal aspects and factors, processing of business taxes, establishing costs, predicting long term development and expansion, as well as exploring financial options and opportunities.