Factoring Blog - For Small Businesses

According to Privacy Rights Clearinghouse, 91 million data records affecting nearly 10 million U.S. citizens have been exposed due to security breaches since February 2005.

Breaches occur from someone hacking into a database, a disgruntled employee stealing information, or sheer stupidity — as in a lost or misplaced disk or laptop.

Based on the public outcry, the U.S. Congress has proposed new laws to address general data privacy and security concerns, although none has yet been enacted.

However, 33 states, including New York, New Jersey and Conneticut, have passed data breach legislation within the past three years.

What does this mean for small businesses? In short, more compliace requirements.

Read more on Keeping Company Information Safe

1. Do you actually need to extend credit to your customers? Is it necessary to offer credit in your business, or are you able to operate profitably by expecting to be paid in cash?

2. Will you accept checks? Most people don’t think of accepting checks as extending credit, but you do take a credit risk when you accept a check for payment. If your customer doesn’t have money in his or her checking account to cover the amount of the check, your customer’s bank will “bounce” the check (return it to you unpaid).

3. Will you accept credit cards? You don’t take a very big risk by accepting credit cards, particularly if you are careful about following the credit card company’s policies and procedures. When you accept a credit card as payment, your bank (as a “merchant” bank) collects the money from your customer for you. In return, you pay the “merchant” bank a fee for doing so, usually from 2 to 6 percent of the bill for most small businesses.

4. Will you offer credit terms? “Credit terms” means the amount of time you give your customer to pay your bill. The type of business that you operate will help determine the type of credit terms that you offer.

Read the rest of Extending Credit - Ten Things to Think About

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If you want to succeed and grow, you must achieve high standards in four essential categories.

1) You must create excellent products and services.

2) You need terrific delivery systems to keep tack and get the products to your customers on time.

3) You have to attract and keep great staff with a winning service mindset.

4) You must build long-term customer relationships that endure and mature over time.

Then you need to answer these questions:

In each category, how good are you now, and how good do you plan to be?

What does it take to keep your customers happy, and keep them coming back for more?

Is it enough to be average? Just like all the others? Or do you need to reach higher? And if so, how high?

More on Improve Your Service - Standards

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For your consideration.

1 - Bring them back alive.
Ask customers what they want and give it to them again and again.

2 - Systems, not smiles.
Saying please and thank you doesn’t insure you’ll do the job right the first time, every time. Only systems guareantee you that.

3 - Underpromise, overdeliver.
Customers expect you to keep your word. Exceed it.

4 - When the customer asks, the answer is always yes.
Period.

5 - Fire your inspectors and consumer relations department.
Every employee who deals with clients must have the authority to handle complaints.

6 - No complaints? Somethings wrong.
Encourage your customrs to tell you what you are doing wrong.

7 - Measure everything
Baseball teams do it. Football teams do it. Basketball teams do it. You should do it too.

8 - Salaries are unfair.
Pay people like partners.

9 - Your mother was right.
Show people respect. Be polite. It works.

10 - Japanese them.
Learn how the best really do it; make their systems your own. Then improve them.

Warning: These ten rules aren’t worth a damn…unless you make a profit. You have to make money to stay in business and provide good service.

More on the Ten Commandments of Customer Service

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Examine the life of any great leader and you will see him putting priorites into action.

Every time Norman Schwarzkopf assumed a new command, he didn’t just rely on his leadership intuition; he also reexamined the unit’s priorities.

When Lee Iacocca took over Chrysler, the first thing he did was to reorder its priorities.

When explorer Roald Amundsen succeeded in taking his team to the South Pole and back, it was due, to his ability to set the right priorities.

Successful leaders live according to the Law of Priorities. They recognize that activity is not necessarily accomplishment. In fact they have an uncanny knack for addressing multiple priorties with every action taken.

Do you set priorities effectively for your organization?

Setting Priorities is the Name of the Game

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The number one reason people don’t do what you want them to do?

They don’t know what you want them to do!!!

You might not believe this, but there are a bunch of people stumbling around out there who don’t have a clue what’s expected of them — 50 percent of all people if you pay attention to the research.

Some of these people report to you — and as frustrating as you might find this, they simply don’t know prcisely what you want them to do.

Communicating explicit expectations may well be the most dificult aspect of a managers job. But it is absolutely essential to creating a high performance workplace.

At the very least, the expectations you communicate to your direct reports must include quantity, quality, and time frame.

I suggest you find a quiet room and start making a list of what you expect from each of your direct reports. A specific list. You might be surprised how difficult this is.

Then meet with each of your people individually and ask them what they think you expect of them. As them what specific results they think they are responsible for.

It will make you want to scream. But it’s worth it.

More on Getting Your Staff to Do What You Want Them to Do and other wisdom.

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Tip of the hat to Sallie Lux of the law firm Brouse McDowell for the advice below.

Just having a document retention policy is not good enough. It must be implemented and reviewed on a regular basis. In fact it is good practice to review it annually just to make sure there haven’t been any major changes in the legal requirements with with respect to any different areas of document retention.

Here are five additional tips to lesson the likelihood your firm will get in trouble.

1. Have and follow a written document retention and destruction policy that complies with applicable statuatory or regulatory laws governing retention of certain types of documents.

2. Make sure that any retention policy contains suspension procedures to be employed when litigation becomes reasonably foreseeable.

3. Communicate with employees to ensure that they are aware of the company’s obligation to preserve evidence and what types of information might be subject to preservation.

4. Involve counsel early to identify types and locations of electronically stored data that may contain information that is relevant to a lawsuit.

5. Involve in-house technology personell to maintain and preserve potentially relevant information.

Once developed, policies must be implemented consistently. Just having a policy is not good enough, you need to follow it.

**Kudos to Smart Business Magazine for sharing this timely information.

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Can a highly operations focused small service company (50 employees) move into a high organic growth orientation?

Usually a high growth orientation means taking more risk, risk in new business proposals, risks in pricing for services, risks in the delivery challenges that are taken on.

These risks types bring great stress to the operations side of the enterprise in that timeframes for response and delivery get shorter, risk factors may get missed in pricing new types of deals and operations management pressure will increase.

Questions for you:

- How can leadership best prepare the operations management for this orientation shift?

- What types of planning and organizational evolution should take place PRIOR to this shift?

- What are the organizational culture influences that need to be addressed before launching this major change?

Any thoughts or comments you might have around this scenario would be great, leave me a comment.

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It is that time of year when we need to start working toward meeting our annual tax form completion and implementing new tax changes in our 2007 business operations.

With changes in Social Security/Medicare, 401K’s, Annual Qualified Plans, Business Deductions and more you need to get check out this handy chart provided by Licata & Toerek.

Get this Important Tax Information for 2007

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