Just as I Remembered: Why Consistency is Important for Your Company’s Success

I like consistency. I bet your customers like it, too.

Consistency brings repeat business from satisfied customers. It’s a simple thought, but one that is often overlooked in small companies.

Franchises are a step ahead in that regard. Although part of the charm of travel is discovering boutique hotels and wonderful local restaurants, if you are in a strange town and didn’t get recommendations from friends or do some research prior to arriving at your destination, are you going to take a chance or simply go with the familiar — patronizing places you recognize and know will deliver the products and services you need?

If you’re in a hurry and driving in a strange part of your own town, are you likely to pull up to a Starbucks or McDonald’s for your coffee fix? You would, after all, be familiar with how the drive-through systems work (even the dual lanes and separate windows for payment and product) and whether or not the restaurant takes plastic cash. You know how many ounces are in each size and what they cost. You probably don’t even have to review the menu unless you are in the mood to try something you don’t generally order.

If your customers are coming back, they are pleased with the consistency of your product or service.

They are also probably familiar with the interaction they expect to have with your employees and have been satisfied with their experiences in the past. Whether your customer chats with a representative on-line or welcomes a member of your staff into his home, he knows what to expect. In retail settings, especially, customers feel confident locating store personnel when employees wear some type of company uniform. Although each is a unique individual, your employees should be relaying a consistent message through consistent behavior. Think of a different scenario: a hospital patient is also a customer. Although the stakes are higher and more personal, patients are looking for consistency from health care workers. If one medical professional washes his hands carefully and dons protective gloves before certain procedures, wouldn’t the patient expect that same behavior from the other staff members?

Also remember to keep consistent with your marketing. Branding is extremely important to a company’s success. Logos and slogans are to be recognized and remembered. Think carefully before making a decision to change either of these. Keep your message consistent in all written materials, packaging and advertising, as well as in the content of your web site and on social media.

Inconsistency is definitely inefficient. Corporate policies and ongoing training go a long way toward encouraging consistency. It is tempting as an entrepreneur to sometimes just take each day as it comes, but this often causes the business owner to spend a lot of time and energy putting out fires instead of preventing the initial sparks.

Thoughtful consistency is an integral part of a successful business plan.

Free Help for Your Small Business

Looking for some temporary help this summer for your small business? How does an enthusiastic, motivated worker at a reasonable hourly rate sound? In certain instances, you might even be able to attract such talent at no cost to your company.

College students looking for intern positions are a valuable resource for many organizations. The National Association of Colleges and Employers (NACE) estimates an 8.5 percent increase for interns hired in 2012, compared to just one year ago.

Internships are a win-win situation for both the entrepreneur and the student. It provides you with new talent at a minimal cost. Interns are generally eager to learn and will work cheerfully and diligently, as they are hoping for the chance to acquire new skills and additional experience. A savvy intern is probably also hoping to impress you and receive a solid business reference and possible future job offer.

Of course, inexpensive labor should not be simply given the lousy assignments no one else in the office wants to handle. Interns are helping your business in any way you ask, but also expect to learn about your company. It’s probably a given an intern knows how to file and take out the trash, so these are not the types of tasks a student is wanting to solely perform this summer.

Most college campuses provide a tight-knit community for students, so word tends to travel quickly when an intern discovers a choice or not-so-choice assignment. To ensure you are able to recruit the best candidates each year, make sure your interns feel valued.

Here are some tips to make the experience a positive one for both you and your intern:

  • Provide a job description, as you would with any paid employee. Include short- and long-term goals, and be as detailed as possible where necessary.
  • Offer an orientation (again, just like any other type of new employee would receive). Ensure the intern has the opportunity to meet everyone on your staff during the first day or two of employment. Handbooks and other materials are welcome.
  • Designate a specific individual to act as the intern’s manager or mentor. This is a huge time-saver for the entire company, as the intern has one person he can rely on for answers to questions, and other staff members are able to focus completely on their other responsibilities.
  • Allow the intern to complete at least one project from start to finish during his stay at your company. Offer the intern the chance to showcase his accomplishments via a formal presentation by the intern to your management team.
  • Provide constant feedback.
  • Allow the intern the opportunity to “interview” members of your team during his tenure. Students generally consider the time spent listening to professionals at all levels of management describe their jobs and career experiences to be extremely valuable.
  • Consider hiring more than one student. A sole intern may feel somewhat like an outsider at his new position, particularly if there are no other employees close in age or relatively new to the company. Providing an “intern team” right from the beginning helps the interns feel more comfortable from the first day – and also gives you, the potential employer, an excellent opportunity to see how different individuals contribute to your organization.
  • Arrange for a specific work area for your intern. Nothing makes an employee (paid or not) feel less wanted more than shuffling him to a different work station every day.
  • Always conduct an exit interview. This is essential for both parties to receive feedback in numerous areas and should help you and your intern better prepare for the future.

 

This year, the U.S. Department of Labor is offering a special initiative, Summer Jobs+Bank, to assist businesses and students with internships. For more information on how your company can participate, visit http://www.dol.gov/summerjobs/Employers.htm.

One final note of importance: Obviously, most interns would prefer a position that compensates them; however, unpaid internships are a viable and legal alternative.

If you choose to offer unpaid internships, be aware that many of the same labor laws and regulations that govern your paid employees will also apply to unpaid interns. Please check with local, state and federal authorities for regulations that will apply to your specific internship program.

No business is too small or too large for an internship program, and everyone benefits if the program is properly managed.
Most entrepreneurs report the experience of seeing their company through fresh and enthusiastic eyes is a special one! We would enjoy hearing about what you have planned for the summer of 2012.

Business Plan Basics

Ho-hum, you may be thinking. Or, boring. Maybe even, when can I possibly fit this into my hectic week?

As an entrepreneur, you are an extremely busy individual who probably shoots from the hip more often than not. So, do you really need to take the time and effort to put a business plan in writing?

Almost every CEO and business consultant in the country would answer with a resounding, “Yes!” The importance of a business plan cannot be overemphasized; however, the plan should be carefully considered and comprehensive and objective in nature.

Many entrepreneurs are quick to write a plan if they are seeking external financing, but the reality is every company needs a plan.
Having a good business plan in place will help you stay focused and achieve the goals you have set.

The U.S. Small Business Administration notes that “a business plan should be a work in progress.” Conditions change every day. Our national economic climate is not what it was ten years ago, and your local business environment has more than likely changed in the last few years. Factor progress or decline in your specific industry into this mix as well.

Focus on what makes your company special: what niche does it serve? Think about where you want your business to be in one year, five years, ten years.
What should be included? An executive summary that states the intent and purpose of the company; a thorough description of the business (including information on marketing, human resources, policies, procedures and competition); financial data (P&L statements, balance sheet, list of equipment); and any supporting exhibits (including resumes of principals, lease agreements and other legal documents).

Time spent today creating a business plan is definitely a solid investment in your company’s future.

Small Business Buyer’s Wish List

We recently presented a wish list for a typical seller of a small business. Now, it’s the buyer’s turn. 

Entrepreneurs – whether they are buyers or sellers – generally agree on several factors that make the business transfer process more seamless overall.

A buyer wants:

  • A solid business – Although that phrase may be somewhat subjective, buyers are searching for stable companies with a track record of success. The savvy buyer approaches the situation just as a lender would: requiring a history of financial data that is able to be verified. Filed tax returns are the preferred record for conducting due diligence. It is also important that a business be established. Most lenders require a minimum of three consecutive years of financial history and prefer that the company was under the same ownership (the current seller) for these three years.

 

  • Reasonable seller expectations – This comes into play at the first moment a buyer begins looking at a business for sale. Does the seller receive an adequate income from his company? Are his revenues increasing or, in this economy, at least staying consistent from year to year? Is his business priced appropriately? Will the seller consider offering some financing?

 

  • Disclosure during the due diligence phase – Buyers hope sellers will share the items requested in a timely fashion and be able and available to answer questions or present further information where necessary. Courtesy and common sense should prevail during this delicate phase of the business transfer process.

 

  • A smooth closing – Just as the seller wishes, the buyer also wants the closing to be a positive experience for both parties involved. It is a time of celebration, not a venue for uncertainty, debate or hesitation. Closing attorneys experienced in the business transfer process assist immensely with a seamless closing. By the time everyone is seated at the closing table, all questions should have been answered, all pre-closing paperwork completed and the buyer and seller should be confident this is a win-win situation for everyone involved.

 

  • A seller who stays involved (for a while) – While a typical buyer probably has some new ideas for the business, almost all buyers want training and initial support from the seller. Buyers want to be successful and retain employees and customers wherever possible and practical. Buyers look for sellers who will spend a week or two showing them the ropes, and buyers are especially appreciative if a seller remains available at a later date should an unexpected question arise. Buyers generally do not want sellers to be involved for a long period of time, unless they have previously presented the seller with an offer of employment. A buyer wants to feel comfortable and prepared as he assumes control of his new enterprise.

 

As I mentioned in Murphy’s previous blog, my experiences working with buyers and sellers who are forthright, reasonable and agreeable have been the most enjoyable and produced the most successful closings. When buyers and sellers have realistic expectations — initially and throughout the business transfer process — and maintain a professional and positive attitude, they typically find the transactions to be pleasant and seamless.

Small Business Seller’s Wish List

In the spirit of the season, we offer a wish list for a typical buyer and seller of a small business. Entrepreneurs who are selling their companies, as well as those looking to purchase, generally agree on what would make the process more seamless overall.

Today’s blog focuses on what the seller wants:

  • A qualified buyer – This not only means someone with the financial resources to meet a down payment and secure financing, it also describes someone with experience owning or managing a business — perhaps with some knowledge of the industry itself. A qualified buyer more than likely has established ties to the geographical area and if married or in a domestic relationship, has the support of his partner.

 

  • An appropriate offer – A seller appreciates an offer that is solid, reasonable and timely. Sellers expect contingencies to be a part of the offer, but also anticipate these to be realistic. One of the most common contingencies is a lease transfer with equitable terms for the buyer.

 

  • A practical due diligence phase – Sellers are pleased to answer questions and share pertinent data during the due diligence phase; however, buyers should take care not to pose queries or make statements that may be perceived as an insult to the seller. Common sense should dictate how the buyer should best introduce discussions on past decisions the seller made or how the business is run on a daily basis. Buyers should prepare their due diligence requests in writing and as soon as possible after the offer has been accepted.

 

  • A smooth closing – The closing should be a time of celebration for both parties, not a time for second-guessing, bickering or hesitation. Hiring a closing attorney experienced in the business transfer process helps immensely. By the time everyone is seated at the closing table, all questions should have been answered, all pre-closing paperwork completed and the buyer and seller should be confident this is a win-win situation for everyone involved.

 

  • An efficient transition – Most sellers, particularly those who created the business from the ground up, truly want to see the business continue to grow and prosper. Sellers want their buyers to be successful, and most will work hard to ensure the buyer is completely comfortable with all facets of the business during the training period that begins after the closing. This transition phase often involves introducing the new owner to suppliers and customers and showing the buyer everything related to running the business, from how to operate office equipment to the best way to manage employees’ schedules.

 

As a business broker, I have most enjoyed working with buyers and sellers who are forthright, reasonable and agreeable. Having realistic expectations on both sides and keeping a professional and positive attitude throughout the business transfer process goes a long way toward reaching a successful closing.

Beware of this Buyer

One of the most difficult challenges facing the seller of a small business is finding a qualified buyer.

The key word in the preceding statement is “qualified.”

Potential buyers are easy to find, but they don’t become buyers unless a closing takes place. There are a lot of lookers around, and they are adept at draining a great deal of unrecoverable time and emotional energy from a seller.

One of the biggest advantages to working with a knowledgeable business broker is that a professional is experienced in winnowing out these tire kickers to find those few, qualified prospects. This is one of the most valuable services a broker may provide to a seller.

If you’re attempting to sell your company without a broker’s assistance, here are some warning signs to keep in mind.

  • The buyer is taking his time in order to find the “perfect” business.

o A prospect who is gainfully employed (notably for a larger corporation in a managerial role) has time on his side. He may be in love with the idea of being his own boss, but may never leave the security and familiarity of the paycheck and career he currently enjoys.

o The buyer may be taking his time because he’s incapable of making such a large, possibly life-altering, decision. Many more individuals than one might imagine fall into this category. A potential buyer may think he is ready for such a challenge, but once faced with actually choosing, finds himself paralyzed.

o If a buyer has been searching for six months or longer, he may have expectations that are impossible to fulfill.

 

  • The buyer has no financing. Although this seems obvious, a buyer might be quick to assure the seller he has the means to obtain cash, and sometimes a seller wants to believe he has indeed found a qualified buyer. Be cautious if the buyer:

o will need financing (unless it’s based on the equity in his home), especially if the buyer has not even approached an outside lender

o has no available cash to pay for closing costs or a down payment

o claims to have a wealthy relative or friend who will be financing the deal, particularly if you have yet to meet this affluent individual

 

  • The buyer’s spouse is not present during meetings or is completely unsupportive of the venture.

 

  • The buyer is immersed in detail too early in the process. He may be asking too many questions, especially relating to insignificant details; he may act as though he knows far more than you as the seller; or he may take a copious amount of notes at every meeting.

 

A savvy business broker will also cite buyer red flags of a more personal nature, such as being very young (late teens or early 20s) or too close to the typical retirement age. Brokers often mention if an individual has lived in the geographical area for quite some time, but is still a renter instead of a homeowner, it might give a seller reason to take notice.

Obviously, this is not a comprehensive list, and some buyers who exhibit these tendencies may turn out to be very well-qualified. However, these characteristics do represent consistent trends in our industry. If your prospect starts to fit the profile of a tire kicker, you may find it prudent to evaluate the time and energy you are expending, as well as the information you are sharing, with this individual.

Do You Hear What I Hear? (More on First Impressions)

When a potential customer contacts your company via telephone, what is the first impression received? Is the caller warmly welcomed by a live operator or receptionist, or does he get dumped into a frustrating, endless cycle of automated voice commands?

Sometimes the obvious is the most easily overlooked. A business owner has only one chance to make a first impression. Today, it’s common for a potential customer’s first visit to your company to be made by telephone, so make that initial contact a positive experience for your caller.

The first time a potential customer visits your company (whether in person, via telephone or through the Internet), he should immediately feel comfortable and confident about doing business with you.

Think about the image presented to someone who phones your organization for the first (or 50th) time. Will the caller feel welcomed and important? Is he likely to remain on the line to finish the transaction or call again for products and services in the future?

Telephone Doctor recently commissioned a survey that discovered the following:

  • 85% of consumers indicated that telephone courtesy makes a difference when choosing which business they will patronize
  • 65% prefer doing business with companies who have real people answering calls versus those that use an automated attendant
  • 65% stated they are frustrated when placed on hold immediately after calling a company
  • 48% refuse to conduct business with a company if they receive poor customer service over the phone
  • The most frequently noted complaint: being placed on hold

 

The nonprofit and nonpartisan research organization Public Agenda discovered that a whopping 94% of its survey sample indicated it was “very frustrating” to phone a business and be greeted with a recorded voice rather than one of a live person.
According to the Bureau of Labor Statistics, telephone operators are one of the top ten positions expected to decline within the next twelve months. Today’s voice recognition systems continue to improve dramatically, and the increase of electronic communication has considerably reduced reliance on the telephone.

Although many companies have made the transition from live operators to automated attendants for a variety of reasons (most notably to reduce overhead), the survey findings discussed in this blog should be carefully considered. Business owners may wish to ensure callers have a way to reach a live operator, and all employees interacting with customers on the telephone should be professional and courteous. Operators should be able to listen and really comprehend what the caller is requesting, so they can answer the question and fulfill the order or get the customer to someone who can.

Here's hoping you hear what your customers do!

First Impressions: A Customer at Your Door

This is the first in a series of several articles on how to better position your company to potential and existing customers.

We've all heard the phrase, "First impressions count." This is a true statement that is sometimes easily overlooked by a small business owner. It seems obvious, but if you have a physical location, you should always be thinking about maximizing your curb appeal.

The first time a customer — an existing or potential one — visits your company, the customer should immediately feel comfortable and confident about doing business with you.

Residential real estate agents often request that homeowners looking to sell first spruce up their homes as much as possible in order to generate interest from potential buyers. The same is also requested from business brokers prior to listing a company for sale.

The time to think about curb appeal is not just when selling, however. Having a professional and inviting entrance is sure to help retain existing customers and attract new ones.

Stand outside the front door of your business and look at the impression you may (or may not) be making through the eyes of your customer. If a first-time visitor walks past your building, is he likely to enter your door? Here are some helpful tips:

  • Is your company name and street address clearly visible?

  • Speaking of signage, do you have enough — but not so much that it appears cluttered? And, is everything spelled correctly? You'd be surprised how often we notice poor spelling and grammar: not the best first impression.

  • Is the exterior clean and pleasing to the eye? Perhaps a coat of fresh paint or some planters at the entrance might be a good investment.

  • Does the front of the company convey the message you want to send to customers?

  • Is the entryway tidy, and is it easy for customers to reach the door and access the business?

 

Of course, first impressions don't stop there. Once the customer is inside, what does he see?

  • Does your reception area include friendly, knowledgeable staff members to greet visitors?

  • Is the lobby clean and uncluttered? (Keep an eye out for messy papers and disorganized working surfaces.)

  • If signage is present, it is helpful or distracting? Is your company's name (and/or logo) prominently displayed?

  • Does the lobby become an extension of the entryway and reflect the message you want to share with visitors?

 

Many small businesses employ the use of a welcoming sign in their reception area. If an entrepreneur knows of a visit in advance, most guests appreciate seeing their name as they enter the front door.

Comfortable seating areas, flowers and plants and the offer of a beverage are other welcoming touches that visitors notice.

Here's hoping your visitors become long-term customers!

Buying and Selling a Business or Franchise

A recent national survey confirmed what business brokers have noted for years: making money is not the primary reason buyers are interested in owning their own business.

When asked to rank 12 factors in order of importance, the majority of buyers did not place potential earnings in the first half of the list. Freedom, flexibility and control of one’s destiny are the main reasons buyers are attracted to independent businesses. Interaction with customers and clients also was consistently ranked higher in importance than personal income.

Keeping these motivating factors in mind during the business transfer process helps buyers and sellers. Qualified buyers generally possess the entrepreneurial spirit necessary to take risks and make decisions. As business brokers, we facilitate this process by interviewing prospective buyers to learn more about their educational and occupational backgrounds and why they are looking to acquire a company. Understanding a buyer’s motivation helps a good business broker suggest listings that may be of interest to the buyer and provide a good fit with the buyer’s needs.

Internet Searches are Key for Business Buyers

Recently, I’ve noticed several articles in various publications regarding changes in residential real estate marketing strategies. It seems that open houses (except those hosted for other real estate agents) are no longer a preferred way to reach potential home buyers. Today’s tech-savvy buyers prefer to research listings on the Internet, taking virtual tours when and where it is most convenient to them. Most buyers, these articles note, make a decision whether or not to contact the listing agent based on these virtual home tours.

This got me thinking about buyers looking for a business to purchase and the similarities of utilizing the Internet for research. The majority of advertising and marketing for business brokers is handled through web sites that feature businesses for sale. While a few of these sites are available to entrepreneurs looking to sell their companies themselves, the majority are available only to business brokers through professional subscriptions.
As we’ve discussed, maintaining confidentiality of the business is a key factor for a successful business transfer. After all, a small business owner does not want to announce to his customers or competitors that he is thinking of retiring or leaving the industry.

The larger sites available to business brokers offer more space for describing key points about the companies for sale, while still maintaining complete confidentiality. Business brokers are experienced in wording listing descriptions that grab attention and highlight the factors most buyers will find attractive.

You only get one chance to market your business. Most buyers will find your company’s listing by searching online. Make sure to maximize your marketing strategy when the time is right for you to sell.