| • |
Listen to your customers. You are not
really selling products or services; you are selling
customer satisfaction. Satisfied customers return to
spend more money and are likely to refer new customers
to you. |
| • |
It is estimated to cost ten times as
much to acquire a new customer as it does to retain a
current customer through good customer service. |
| • |
If your company runs well now in your
absence, it will run well in the event of your
disability or death. If you are currently
indispensable, start training people now. One of the
most rewarding forms of retirement is to own your own
company and to be absent as much as you like. |
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The word ability spelled "A.B.I.L.ity"
could stand for Accountant, Banker, Insurance Agent, and
Lawyer. These professionals handle a variety of business
problems every day. They make excellent sounding boards
for proposed transactions. Consulting with them before
you conclude any deals can save you many problems. |
| • |
You can be your own best business
troubleshooter. Consider arranging a trip to visit a
half dozen businesses just like yours, but outside your
trade area. Discuss products or services, customer
relations, vendors, physical plant and equipment, and
financial statement information with these noncompeting
colleagues. Arrange a five- to ten-day trip. Take your
financial statements, a copy of your floor plan, your
camera, and a long list of questions. When you return,
you will be able to inform your staff of all you
learned. This trip is especially beneficial if you are
not affiliated with a franchise business. |
| • |
Every business should operate from a
budget. Your last year's financial reports serve as an
excellent guide to setting this year's budget. Since it
is designed with the best information you have available
at the outset, the variances from the budget figures may
give you valuable information in preparing the next
year's game plan. |
| • |
Before you start a new business, be
sure the community can support such a business. Some
areas are not large enough to warrant certain specialty
shops. A bicycle shop, for example, may take a
population base of 50,000 people to make it profitable.
A grocery store, on the other hand, can be profitable in
a town of only a few thousand. |
| • |
Is it necessary or profitable to have
accounts receivable? Credit is necessary to attract some
business, and it is profitable if properly managed. For
example, a construction company finds it impractical to
issue credit cards to all its employees and inconvenient
to use a check for every purchase. In exchange for the
courtesy of an open account, such a customer should be
willing to pay immediately upon receipt of a billing
statement. |
| • |
Business deals and special franchises
which sound too good to be true usually are. We will
gladly assist you in reviewing any new purchase or
business proposal. |
| • |
Business partnerships (marriages)
seldom have the same courtship afforded most marriages.
In the absence of this courtship, you should have your
attorney draft a well-written partnership agreement. It
is also important for family partnerships. |
| • |
Don't incorporate your business without
first checking the long-range tax and nontax
considerations. There are many small
corporations that would have been better off operating
in some other legal form. |
| • |
Some businesses receive penalties for
late payroll tax deposits. To avoid such problems, don't
sign payroll checks unless the first check in the stack
is the payroll deposit to your bank. This may have you
paying deposits earlier than required, but you will not
be receiving penalties. |
Approximately one million new
businesses are started every year in the United States.