Go the Extra Mile for Your Customers

One of the current conundrums for small businesses is how to cut costs without letting customer service standards slip. In a recent survey of 2000 consumers by the accountancy software company Sage UK, they found that customer service performance was becoming even more important. Nearly a third of their sample reported that they wouldn't give a second chance to suppliers who let them down in some way.

Consumers are Getting More Demanding

Providing outstanding customer service has always been an important factor in business success. Keeping your customers happy brings you repeat business and saves on the time and money needed for marketing and pitching for new contracts. Now it seems that consumers are seeking more for their money in terms of the type of service they receive, both when they buy and following a purchase.

The basics of good customer service are just being polite, helpful and responsive to the customer's concerns. Whatever pressures you and you staff are under, they must be put out of mind at times of interaction with customers, so that you can all appear upbeat and friendly, and listen to what the customer is saying. In the Sage survey, only 22% believed that businesses they dealt with were giving outstanding service while riding out the economic downturn.

The Extra Mile Campaign

Sage's extra mile campaign has been launched to provide some recognition for companies providing good customer service. You and your customers can use the #extramile hashtag on Twitter to get public appreciation where you think it's deserved.

If you'd like to be nominated, get your staff to brush up their customer service practices. Set a good example by treating your personnel the way you'd like them to treat your customers. Welcome them each day with a friendly smile; get to know them by name and remember their birthdays and other things that matter to them; listen to their niggles and deal with them; ask for their feedback and give them credit for useful ideas.

Make yourself available to customers too, and always be ready to deal with complaints in a way that doesn't leave them feeling let down. Remember that statistic about not getting a second chance. Here's another one that comes from a different survey: of customers who are satisfied that their complaints are dealt with quickly and reasonably, 72% will continue to use the company they complained to.

Are you going the extra mile for your customers? Who would you nominate for the Sage UK extra mile campaign? Perhaps it will be your outsourced bookkeepers.

Don't Fall Foul of the Phishers

What would you do if you received an email saying you were due a large tax rebate and should go to a link to claim it? If you are sensible you won't click on that link. You could have received one of a batch of phishing emails which will take you to a clone of the HMRC site. Once you are there, you'll have a request to give credit or debit card details. If you comply with that, your bank account will be emptied and your credit card maxed out.

HMRC doesn't use email to advise about rebates due, only snail mail. It will never ask for credit card details either. No matter how legitimate the email and the website look, they aren't the real thing.

Why Do the Phishers Do it?

How can it be worth the effort of copying a website and sending out these emails? Apparently the phishers have acquired thousands of email addresses. They just have to set them up as a group, type in the message once and press send. And when we all turn on our computers and get connected, they pop up in our inboxes, or perhaps in the spam folder if we are lucky.

Unfortunately there are always some gullible people who click on the link and comply with what they think are HMRC instructions. Then the dastardly phishers move fast to gather their funds and disappear.

What to do if you Get One

HMRC believes that the trend for trying to get easy money this way is growing, so we are all going to get more and more of these phishing emails and must be on our guard against them. The HMRC website requests that, if you receive such an email, you forward it to phishing@hmrc.gsi.gov.uk to assist in investigations to try to find the criminals behind them, recover fraudulently acquired cash and put a stop to their activities.

The site gives a list of email addresses that have been used for phishing, none of which are ever used by the revenue. It also mentions other methods used to con people out of their hard earned cash.

Some fraudsters make telephone calls claiming to be tax officers. They ask for bank details so that a tax refund can be made. Others send text messages asking you to call them. This is more difficult to recognise because HMRC officers do sometimes leave messages asking people to call them at their local office. Always check if the telephone number is correct before making the call.

Take precautions. Don't get caught out by the phishers.

The Benefits of Non-executive Directors

Do you have a non-executive director, or have you ever considered it? There are many benefits to be gained if you have the right one. A good non-executive director will take on many different roles as your business develops.

In your start-up phase an external director could bring experience of your marketplace and contacts from within it. He or she should offer guidance and open doors for you. The non-exec might even help with opportunities for business, taking part in meetings and presentations. Acting as a mentor to you and other senior members of your team, your non-executive will attend meetings, give opinions and advice, and support whatever decisions you make.

How to Find the Right Non-executive

Advertisements for non-execs usually find plenty of applicants with a mix of motives. Putting such positions on a CV is always helpful to the career of an ambitious go-getter. You could even find an aspiring non-exec who will not require a fee initially, but you would still need to be sure they could bring what you need to your board meetings. It might be more advantageous, and more profitable in the long run, to pick someone with experience of the role who would expect some remuneration, but be able to bring you more benefits.

Before you start to weed them out, decide exactly what you are looking for in terms of the relationship. Look at its duration, how often you will meet during that time and what you expect to get from it. When you interview them, make all this clear, and don't think of appointing anyone unless you are confident about what and who they know that can help you reach your business objectives. Be sure to discuss the financial aspects with your outsourced bookkeepers beforehand and be clear about what you can afford. Then you can have a maximum fee in mind and negotiate to no more than that.

Get the Most from the Relationship

Have an option of one-to-one meetings where you can review how things are going and speak frankly to one another. Regular debriefs can make sure you are both on the same wave length and neither of you are expecting too much of the other. The role of the non-exec should change along with your business development, and you both need to recognise the shifts and phases you need to go through. It's a good idea to have these discussions before each board meeting so that you can plan strategies and iron out any problems. Speaking with the same voice at your board meetings can save valuable time and be reassuring to other board members.

Remember the advantages of a non-executive director when you are considering how to grow your business.

Farewell Default Retirement Age

Do you have anyone over 65 on your payroll? October is the month when the Default Retirement Age (DRA) begins to be phased out. Unless you informed them of the date you intend them to retire before the 6^th of April this year, you can no longer force them out because they have reached the DRA. While they retain their right to retirement at 65 if they wish, you can no longer oblige them to do so.

Will the DRA be Good for Your Company?

Of course, many employers have been keeping workers on after that age for quite some time. Some have been happy to recruit more mature people because they perceive them to be more reliable and loyal than the younger generations. They have more work and life experience, so more knowledge of the world and how the markets operate. They are often more willing to keep going when things go wrong, and to persevere until they get it right. And statistics prove that overall they take fewer sick days, despite being of an age when you would expect them to have more health problems.

Having a balance of different age groups among a workforce is no bad thing, provided it has a healthy culture of respect flowing both ways between younger and older employees. Everyone should be valued for what they can bring to the party. While greater energy and enthusiasm for state of the art technology and other developments might come from a younger group, many of their older colleagues might have more staying power and more wisdom to see both advantages and disadvantages of proposals.

Will the Younger Generation Suffer?

Some people believe that the knock on effect will be significantly fewer jobs for young first time applicants, especially in the unskilled sectors. To some extent, this appears to be inevitable. However, young people without skills are hardly likely to be recruited into vacancies left by retirees who have acquired many skills over the years. There will still be areas where this type of young worker is needed.

A number of companies have introduced more flexible working hours to accommodate older workers who would like to continue in work but slow down a little. Part time positions are ideal for this and allow businesses to retain the skills and experience of their more mature staff, and still have vacancies for all ages of applicants.

What About the Financial Consequences?

Anyone over 65 that you have to let go must receive the statutory redundancy package. There may also be an effect on your ongoing payroll budget, so discuss it with your outsourced bookkeepers before you decide on your future HR strategy.

Freelancers Sometimes Make More Sense than Employees

When you are supplying a service or a product, that's what you need to concentrate on if you are to make any money. But running a business involves all sorts of other jobs that have to be covered and can keep you away from your core activity. That's why you need to employ other people to deal with all these intricacies, allowing you to get out there and make a profit.

When Cash is Hard to Come By

But what if you have a very young business where funding is stretched, or the recession has hit you so hard you've had to let people go? You simply can't afford to take on permanent employees.

That's where freelancers come in. You accept or negotiate their charges up front and employ them for as little or as long as you can afford. They know that you will review their performance before you call them back, so they will do their best for you.

Use of Freelancers is Soaring

Recent research has shown a phenomenal rise in the use of freelancers by small businesses. The rise in the year to July 2011, compared to the previous 12 months, was reported to be 68%. And around one in 20 workers in the UK works as a freelance. Many of them have specialist skills and experience that can be a real benefit to your business, and would command an extremely high salary if you were to take them onto your payroll.

Benefits of Using Freelancers

When you use freelancers, you pay for the time they work for you, not for their holidays or when they are off sick. And remember, you are under no obligation to offer more work than you can pay for. Just make sure this is all agreed in writing before they start work.

Whether you want admin help or assistance with a marketing campaign, you'll find experienced freelancers who won't need training except for a quick induction. They will be accustomed to finding out what they need to know about each business they work for, and they won't take up too much of your time. And they can often bring a fresh perspective to the tasks involved, so you can benefit from ideas you may not have thought of yourself.

This is particularly helpful when you've outsourced your bookkeeping if you are concerned about credit control or meeting regulatory deadlines. It's always worth considering a freelancer who doesn't have to go on the payroll.

Sole Trader or Limited Company?

Many micro businesses start life as a sole trader. In the first year at least, if the profit is likely to be less than the owner's personal tax allowance, this is the sensible thing to do. If you anticipate significantly higher earnings, or if your start-up really takes off, you should consider setting up a limited company to maximise your personal profit and reduce your personal risk.

What are the Risk Factors?

As a sole trader all the debts of your business are your own. If things go wrong, you risk losing any or all of your personal assets. If you own a limited company, the debts belong to the business, not yourself personally, unless you have signed any personal guarantees. You are not in danger of losing your home in the worst case scenario.

What are the Tax Factors?

As a sole trader all the profits of your business are your personal income and you are taxed on them accordingly. You will also need to pay Class 2 National Insurance (NI), currently set at £2.50 a week, and Class 4 NI on profits over the current threshold of £7,225.00.

If you set up a limited company, you could add members of your family or others as directors if you wish, or you could be a sole director. You do have to register as an employer and submit the relevant employee returns.

On profits of up to £300,000, the company pays corporation tax of 20%. It pays salaries to directors and dividends to shareholders. You will pay no tax or NI on a salary of £589.00 a month, which is an allowable expense against profit. If this is your only income and your personal tax allowance is the normal £7,475.00, as long as there is enough profit in the business, you could also pay yourself a dividend of up to £38,934.00 without incurring any income tax.

Get Professional Advice

On the face of it, as soon as a business becomes reasonably profitable, it would be wise to set up a limited company. Under some circumstances, it might even be wise to sell your sole trader business to the new company.

But things are rarely as simple as this. Most people have other income to factor into the equation, even if it's just bank interest on their savings. You should always seek advice before setting up a private company. Discuss it with your outsourced bookkeepers, and if it still seems feasible, talk to your accountant.

Small Businesses: Get help with Problem Solving

When you have a business problem to solve, what do you do? Do you mull it over for as long as you can and then make a decision because there's no time left, even though you're not really sure about it? Do you ever discover when it's too late, and you are briefing your staff that someone actually had a better solution, but they hadn't known it was needed?

Problems come in many forms. It could be how to deal with a customer's complaint. Perhaps it represents a significant opportunity, if only you knew the best way to respond to an invitation to tender or invest. Or is it that a competitor has the edge on a product, and you must find ways to develop something even better?

Getting a Handle on the Problem

You may have to make the decisions for your own business, but that doesn't mean you have to make them in isolation. The first thing you have to do when a problem arises is make sure you have a clear definition of it and what caused it. You need to clarify it in your own mind before you can communicate it to anyone else you might decide to involve. Sometimes a problem might be raised by someone else on your team, and if you haven't already recognised it yourself, this aspect is really crucial. No problem can be effectively solved unless it is fully understood.

Who Can Help?

For something really serious, if you can afford it, you might want to call in a consultant who specialises in your sector and market, as well as in problem solving. Or you might prefer to look closer to home. Arranging a group brainstorming session can be less time consuming for you than talking to people individually. You'll only have to explain the problem once and make sure people understand its parameters.

When you come to evaluate the ideas you'll be really surprised at some of the things that come up. Make it plain that you value everything that has been suggested, even though they can't all be used at that time. If you get everyone to award points to the ideas after they've been discussed, you might come away with a clear winner.

All kinds of people could be involved, from senior managers to the office gopher. You could even invite your outsourced bookkeepers to take part and offer some independent wisdom. Don't struggle on alone. Even just talking through a problem for ten minutes can help you see the light.