Small Business Options for Year-End Cash Flow, Tax Benefits

 

Dec. 2, 2011

December is the month for small business owners to reflect on options for year-end cash flow and tax benefits.

In general, here are items to discuss with your accountant and tax advisor:

Your first concern should be to reduce your tax obligation next April. Unless you already know you have too many write offs, you can further accomplish it with legal strategies to delay income and accelerate your expenses.

Decide what equipment, furniture and supplies you can buy this month.

Unless you have cash flow issues, and if your calendar year is your fiscal year and you run your business on a cash basis, delay mailing your invoices.

If you don’t have a retirement account, establish a qualified plan. It’s important for diversity in a downturn or when times are good. This will help your tax picture, as well.

If you’re considering updating your bookkeeping and technology systems, do it before the end of the year. In this way, you’ll make it easier to start fresh for the New Year. You’ll want to segregate your old records from the new.

As for financing any new equipment purchases, do your due diligence. Determine your best options for financing, as well as for your tax situation.

Understand how the IRS will view your situation in terms of Section 179 depreciation deductions and bonus depreciation.

In addition to understanding the pros and cons of possible tax incentives, know your credit situation. For the best credit worthy businesses, lease financing might be a viable option. But it’s getting more complicated with financial institutions than in past years.

Weigh the possible benefits for acquiring new equipment. You’ll need to make a financial forecast.

If you do buy or lease, it also goes without saying to comparison shop all fees, rates, and terms. Avoid paying so-called application fees.

Should you decide to buy from different vendors, consider grouping all the purchases into one package, which means you’ll benefit from lower fees and rates.

Consider these options small business options for year-end cash flow and tax benefits. But remember it’s not tax advice for your situation. Again, see your accountant and tax advisor for counsel as part of your decision-making.

From the Coach’s Corner, here are related resource links:

Tax Tips for Your 2011 Year-End Tax Planning

Budgeting Basics for a Micro Business

Why Accounting, Finance Can be Ideal Careers for Women

12 Tips for Profits to Keep Your Business Dreams Alive

“If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don’t get wet you can keep.”

-Will Rogers

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Budgeting Basics for a Micro Business

 

For entrepreneurs, often the most difficult part of launching a business is preparing financial projections. It may not be the most enjoyable task, but budgeting is imperative for maximizing performance.

“Eight out of 10 companies fail in the first two years due to insufficient cash,” warns esteemed financial consultant Roni Fischer.

In addition, you’ll need to be on top of your financials in order to grow – whether you hope to obtain a bank loan, attract investors, invest in equipment, or hire employees.

“Companies need to develop both an annual operating budget and a cash plan,” says Ms. Fischer.

“The annual operating budget provides a roadmap for your operations for the next 12 months – including your projected sales to customers, your associated costs to produce these items, your marketing and customer services costs, as well as your overhead expenses,” she explains. “The difference between the revenue (sales to customers) and the costs is your projected income (or loss) for the year.

“Along with the annual operating budget, you’ll want to project your cash flow,” adds Ms. Fischer. “For early stage and emerging companies, cash flow is difficult to sustain as growth always requires cash. Therefore, it is imperative to know when you will be collecting receipts from your customers and when your bills need to be paid to ensure you have adequate cash to honor your payroll and vendor payment commitments.”

Ms. Fischer is president of RLF Associates, Inc. in the Los Angeles area. I’m very familiar with her work. As a leading consultant for over 25 years, she provides expert financial and management solutions for firms ranging from start-up companies to multi-hundred million dollar corporations.

Ms. Fischer offers the following guidance for preparing your monthly projections:

Key Elements for an Annual Operating Budget:

1. Prior Performance. If you have data from the prior year(s), this can be helpful in preparing your current year budget. 
2. Sales Projections. Be pragmatic about your forecast. Include how much you plan to sell and at what price. Anticipate the elasticity of customer demand vis-à-vis economic conditions and price points. 
3. Cost of Goods Sold. This includes materials and labor (your “direct” costs for producing the items), and your ”indirect” costs for manufacturing. 
4. Expenses. Include your sales and marketing expenses as well as your overhead costs – such as salaries, rent, utilities and supplies. 
5. Operating Income. Calculate sales, less cost of goods sold, less expenses to determine your operating income (or loss). 
6. Assumptions. Ensure that your assumptions are reasonable and achievable. Base your projections on your experience, instincts, market research and other available information.

Key Elements for a Cash Plan:

1. Beginning Cash Balance. Start with the cash you currently have in the bank. 
2. Cash Receipts. Estimate the cash you anticipate receiving from your customers; considering the payment terms you have offered to them. Keep in mind that although you may have “sales” in December, you may not collect the cash until January or February (or later). 
3. Cash Disbursements. Project the cash you will need to pay your expenses in a timely fashion. Consider every expense from payroll (and associated payroll taxes) to rent to other operating costs. 
4. Cash Surplus or Shortfall. Starting with your beginning cash balance, add your cash receipts, and subtract your cash disbursements. If the result is a “positive” number, you have a surplus. If the result is a “negative” number (less than zero), you have a shortfall, and will need to review your annual operating budget to determine which expenses you can reduce, which payments you can defer, or where you can obtain a loan to cover this shortfall. 
5. Financing. Determine if you have the required funds for the period in question. Hopefully, you will have a surplus. If not, consider other sources for obtaining money such as a bank line of credit, factoring your accounts receivable or obtaining a loan from friends or family members. Make sure you maintain a cash reserve for contingencies. 
6. Ending Cash Balance. Calculate your ending cash balance by starting with your beginning cash balance, adding your cash receipts and any financing, and subtracting your cash disbursements. The resulting amount will be the beginning cash balance for the next period.

You’ve no doubt heard the adage, “Cash is king.” So make certain you have ample reserves to operate your business.

Ms. Fischer’s Web site: www.rlfassociates.com.

(Note: She is a fellow member of Consultants West, www.consultantswest.com, a roundtable of veteran consultants in the Los Angeles area.)

From the Coach’s Corner, here are some related resource links:

Primer for Best Practices in Preparing Financial Statements

Accounting / Finance – Why and How to Determine Your Break-Even Point

In Any Economy, What Drives Your Profit, Really?

Embezzlement – Tips to Protect Your Nonprofit or Company Assets

6 Values for Financial Protection

11 Strategies to Keep your Small Business Floating above Water

“If you aren’t practicing and playing to be first, then maybe you shouldn’t be an entrepreneur.”

-Robert Kiyosaki

 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

Primer for Best Practices in Preparing Financial Statements

 

A good financial system is vital for your business. Not only will a properly prepared financial statement tell you what’s transpired in your business, it will give you a snapshot regarding your future. 

Measurement of cash flow is paramount. 

In the two forms of accounting – cash basis vs. accrual basis – the cash-basis system is much simpler. 

In essence, the salient focus in the cash-basis system is getting money into your bank account. Then, you worry about paying the bills. When you make a sale, you deposit the funds. The date you receive the funds is recorded as the selling date. It doesn’t matter when you made the sale. 

Naturally, you pay your bills when the money is available. FYI, it doesn’t matter when the expense was incurred. In a cash-based system, the expense is recorded when it’s paid. 

Also, in cash-basis accounting, very little focus is given to matching the time period when the money is earned or the duration when they are incurred. 

In contrast, accrual-basis accounting is more complex. It will match your revenue to the actual period of time in which it’s earned; plus, it matches your expenses to the corresponding period of time in which they’re incurred. 

Again, it’s not nearly as simple as a cash-based system because it supplies a lot more data concerning the financials of your company. An accrual system gives you more meaningful information. You’re more able to keep records of the payments from the customers to whom you give credit. And it presents more information on your amounts due to your creditors. 

So, to keep your fiscal house in order, there is a common-sense approach for preparing financial statements. By using data from your ledger accounts, entries can be made on a worksheet. 

For the worksheet, it’s suggested you prioritize your entries in the following order: 

1. Income statement
2. Statement of retained earnings
3. Balance sheet
4. Cash flow statement

Here’s an explanation of each: 

Income Statement. You should include your expenses, revenue, and your net income. That means, of course, you convey your ledger account balances from your expenses, revenue, and your capital gains or losses. 

Statement of Retained Earnings. This report contains information from the start and ending of your retained earnings. 

A statement of retained earnings is derived from the following sources: 

• Using your previous statement of retained earnings, list your beginning retained earnings.
• From the prior income state, show your net income.
• Indicate the dividends paid from this accounting period.

Balance Sheet. Your balance sheet shows the following: Assets, liabilities and equity of shareholders in the company. 

How it’s assembled: 

• Show the remaining amounts of your asset accounts. They include cash on hand and your accounts receivables.
• Indicate your liabilities in what’s aptly named your liability accounts. This will include all accounts payable and notes.
• List your capital stock balance.
• Record your retained earnings – this is taken from the statement of retained earnings. 

Cash Flow Statement. All the data is vital, and my sense is that the cash flow statement is all-important as it reflects your ability to succeed in business. 

It includes the numbers that show why there are fluctuations in your cash on-hand. The cash flow statement will indicate your sources of cash. Further it will indicate how you use cash in all phases of your business – including operations, finances and investments. 

Remember the difference between accrual and cash systems. As a cash-basis report, your cash flow statement can’t be drawn from the ledger account balances of an accrual accounting approach. 

So, you use one of two methods to create a cash flow statement from accrual-system data. 

Your optional methods are: 

1. Direct – subtract your cash disbursements from your cash receipts in this method.
2. Indirect – from your net income, you add or subtract your non-cash entries.

From the Coach’s Corner, here related resource links: 

8 Simple Strategies to Give You Pricing Power 

Step-by-Step Solutions for a Company Turnaround 

Management Strategies for a Successful Turnaround

What No One Tells You about Raising Investment Capital

What Should You Divulge When Asking for Investment Capital?

Eight Strategies to Consider Before Starting A Tech Business

“The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality.”

-Chris Chocola 

 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

11 Strategies to Keep your Small Business Floating above Water

 

 

If it’s a challenge to keep your small business from drowning in the current economy, you’re not alone. Profits are problematic everywhere — from advertsing firms to tech startups.

The good news is not all small firms have cash flow issues. You can be confident in knowing that as a small businessperson, you’re an important part of the nation’s economy.

The Small Business Administration’s Web site provides some salient data about the accomplishments of small business:

• They comprise 99.7 percent of all employers
• Employ more than 50 percent of all workers
• Account for 44 percent of the private-sector payroll
• In  the last 15 years, created 64 percent of the jobs
• Hired 40 percent of all high-tech employees
• 52 percent are home-based, 2 percent are franchisees
• Responsible for more than 50 percent of the nation’s nonfarm private gross domestic product
• Constitute 97.3 percent of all exporters and 30.2 percent of the dollar value
• Generate 13 times more patents than their big-business counterparts

For successful small firms, strong cash flow doesn’t just happen. They’ve got a system. They plan and swim with precision.

Here are tips to stay afloat:

1. Start by writing a gratitude list. Digest and relish what’s working in your career and life. Beleaguered business owners spend too much time worrying about what’s not working. This includes little things like consistently saying thank you to your customers, vendors and employees. Forget the hackneyed phrase, “Have a nice day.” An attitude of gratitude will help brighten each day and will make you more receptive to new ideas.
2. Chances are you’re feeling disorganized. Write a to-do list of day-to-day priorities. Focus on just one thing at a time. Scratch each accomplishment off the list.
3. Feeling burned out is also a common symptom. Start an affirmation list of your qualities – personal and business. Daily review it and remind yourself of your qualities. No item is too small to list.
4. In cash flow, practice the two Ms – monitor and manage. Take inventory of your situation. Assess where you are by performing a break-even analysis. Predict spending and what trivial expenses can be cut. Make sure, though, you don’t cut muscle – marketing and human resources. Treat your employees as human capital. And make sales and marketing an important part of every day.
5. Understand how your business should profitably function with business processes, and what is truly necessary for your survival. That, of course, includes key performance indicators (KPI), setting goals and measuring results. KPIs will range from products to customer satisfaction.
6. Network. Develop strategic partners to save costs and to promote your business. Be seen as a team player. Promote your industry. By building up your profession, you will help yourself. Become the go-to person in the eyes of the community and news media. Besides, it’s true that rising tides raise all boats. Do something positive when your public officials compensate for revenue decreases by creatively increasing fees and taxes, which hurt the economic climate. With like-minded businesspeople, speak out. By brightening your small-business economic environment, cash flow will turn green for everyone, including you. Picture yourself not being uptight about money – there’s enough to go around. Just look out for your industry and company.
7. When feasible, use the three Rs – recycle, reuse and reduce. Unlike a large business, you don’t have big cash reserves and customer base. Leverage all the possible money-saving tools in your business and personal life.
8. Stay focused. Fine-tune as you go, but in general, stick with your roadmap. Don’t panic and steer off course. There are no magical miracles or detours. If you’ve done your strategic planning, don’t engage in worry or self-doubt. Do the planned footwork.
9. Look for opportunities to multiply your sources of revenue. That includes buying out competitors, especially, if you get a favorable price, terms, and valuable talent. Check with your CPA to see if a leveraged buyout is workable. You’ll save cash flow.
10. Take advantage of technology. Staying current on technology will help you save time and money while increasing revenue. The more mobile you are, the more competitive you’ll become.
11. Look around to help someone less fortunate than you. It will help you keep a smile on your face. Customers, vendors and employees will love it.

Use these basics, and you, too, will stay afloat. Moreover, you’ll enjoy the swim.

From the Coach’s Corner, here’s more on how to Make Money: Four Options for Soaring Profits.

“I don’t like money actually, but it quiets the nerves.”

-Joe E. Lewis

 

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Terry Corbell is a business-performance consultant and profit professional.  Click here to see his management services (many are available online).  For a complementary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Are Accounts Receivables a Problem?

 

There’s an old adage, “A sale ain’t a sale until the money’s in the till.” But increasingly, receivables are continuing to haunt businesses as their customers struggle in the much-awaited recovery. Slow-pay has become a habit for many customers.

As any entrepreneur knows, positive cash flow is paramount for business success. Poor cash flow is the No. 1 headache because cash is king. That’s also why many businesses have failed after their lenders and credit card companies abruptly slashed the lines of credit. It’s a contributing factor for the downturn.

Too much money that’s due you but left sitting in a customer’s checking account is a recipe for business death. Even if you finally collect, collection of old money costs you plenty and is worth less to you.

If you’re having challenges collecting money, true, you can blame the economy. But perhaps it’s worth your time to assess your invoicing. The structure and the verbiage in your invoices could be contributing to your woes.

If your invoice simply indicates “Payable upon receipt,” you might be encouraging your clients and customers not to pay on time.

Many businesses use invoices that take the place of statements. I wouldn’t insert columns that indicate “30 days”, “60 days” or “90 days” as an aging report. That’s the purpose of a statement if the invoice is not paid on time and to show a paper trail of the account. Otherwise, the psychological message you’re sending is “You don’t have to pay me in a timely fashion.”

Encourage a quicker turnaround by including the actual due date. That’s the seed you want planted in the mind of your customer.

In downturns, it’s usually a good idea to offer a 1-2 percent discount – if the profit is significant-enough and if your invoice is paid right away.

Another tactic, especially for consultants, is to present the invoice personally. In that way, you’ll get an instant report card on how the client feels about the relationship and your deliverables. (The ideal scenario is to work off a retainer.)

Besides, once you start making collection calls, you risk friction in what could be a good business relationship.

Finally, you might want to review your procedure for checking your prospective client’s credit and bill-paying history before you start your delivery process. Make sure your payment-authorization agreement includes a provision for the customer’s signature agreeing to pay the invoice, and other expectations. But that’s another topic in itself.

Oh, and start relationships on the right footing. In the beginning, get a written agreement on when payment is expected.

From the Coach’s Corner, here’s some related information:

How to Ease Debt-Collection Headaches

Step-by-Step Solutions for a Company Turnaround

Investor: Tips for Increasing Cash Flow, Profits

 

For a growing business, cash flow is crucial for profitability. That’s also true for the biggest companies and sectors traded on Wall Street – airlines, cars, financial services, oil or technology.

Every company is concerned about cash flow; but in 2008, 128 of the Fortune 500 companies in the nation had red ink. They include General Motors, Citigroup, Motorola, AIG, Merrill Lynch, ConocoPhillips, and Time Warner.

Cash flow enables you to make productive decisions to navigate and grow in the competitive marketplace.  

No one knows that better than angel investor John B. Dimmer, the managing member in FIRS Management LLC, a private investment firm based in Tacoma, WA.  He is also a director at three companies and has extensive management experience.

Here is a sample of his cash-flow solutions:

Q: How do you recommend predicting a cash-flow crunch in time to do something about it?

A: You need monthly income and expense forecasts that are established at the beginning of the business year. These must be realistic numbers that all of the management staff has agreed are reasonable. The second things you need are timely and accurate financial statements.

It is very much like planning a road trip in the car. You are trying to get from point A to point B, so you plot a route. You know that there are landmarks along the way. Every now and then you need to stop and check for these landmarks. If they show up where you expect them, you know you are on the right track. If not, you need to evaluate how far off course you are, and take corrective action.

Q: What strategic process do you recommend to evaluate the causes of cash deficits? What are the most promising solutions?

A: Getting back to our roadmap analogy, if you don’t see a landmark that should be there, or you find a new landmark that wasn’t on the original plan, you need a process for getting back on track. You need to take the time to evaluate where you are, where you should be, and what went wrong.

When you are off plan, there are some fundamental questions that need to be asked: Was the original plan flawed? Has there been a fundamental shift in the business such that the original plan is no longer applicable? Did we make an execution error? When, where, and what was it? Can it be corrected? What are the critical variables with respect to getting back on plan?

Usually this involves one primary variable, which is money. Whatever solution you take, you need to make sure you have enough money to fund it through implementation.

Q: How do you recommend finding creative ways to keep the business alive until sales pick up?

A: One of the mistakes I often see are entrepreneurs who staff their organizations under the assumption of optimum activity. The truth is that there are cycles to business. While not all business can use contract help, I like to try and have my companies staffed to a smoothed-average that is just above the troughs and just below the peaks. In this fashion, you can quickly and effectively reduce your labor costs in times of a slowdown without causing a morale-crisis with your permanent employees. I would also use slower times to beef up on training in preparation for when the good times return.

Finally, encourage your staff to make things happen. When we hit a slowdown in the car business, we ask our sales staff to get on the phone and start calling people. This usually starts with former customers and takes the form of a friendly call simply to inquire how everything is going with their car. Often times, you discover that they love their car, and they have a friend who is interested in buying a new car. Sometimes you find that they love their car and they want to buy another. And sometimes you find that there is a problem. Problems, however, create opportunities. If you invite them to come in, and then solve their problem, they will remember that you were proactive. They will tell their friends about their experience, and their friend will come and see you for their car needs.

Q: What about negotiating with investors or other financial supporters until cash flows increase?

A: Investors hate bad surprises, especially when the surprise is accompanied by an emergency need for funds. Assuming you created the roadmap, and are tracking your progress, you should be able to see the bump in the road well before you actually hit the bump. Most investors are business people who have been down the road before and know that everything is not smooth sailing. They will appreciate the fact that you have a plan, that you are tracking your results against the plan, and that you have foreseen a problem before it hits.

Generally cash flow problems mean you need to borrow more money or raise more equity. If such is the case, have your presentation for raising new money ready to go so that you can transition from the communication stage to the pitch. Be humble, because the last thing I really want to hear as an investor is how smart you are and how great everything is going when, in fact, you are off plan and running out of money.

Part of the negotiation is an acknowledgement of the problem, a rational analysis and a well-crafted solution. You, as the owner, may need to take a bit of a hit in order to implement a solution. This might come in the form of a down round of fundraising where you are force to make up the dilution to the other shareholders out of your own holdings. Know what you are and are not willing to do. If you are forced to give up something to keep the company alive, figure out how to get it back, perhaps via options, if your revised plan was the proper call and the company comes roaring back.

Q: How do you know when it’s time to close or sell the business?

A: I always want to stay in the game, even when it is two outs in the bottom of the ninth inning, you are down by five runs, and the count is full, there is still a chance you can pull off a win. Nonetheless, I try to keep entrepreneurs from getting in so deep that if their company fails, they are wiped out.  I’ve been involved with two companies where I had to tell the entrepreneur that they shouldn’t put any more money into the operation.

In one of those instances, we were able to locate a buyer for the company. The purchaser was a publicly traded entity that, since the purchase, has taken a bit of a down-turn, so the jury is still out as to whether the entrepreneur will come out whole. Nonetheless, it was a better option than closing the doors. With the other company, we have what we feel is great technology; we just can’t seem to get a revenue stream developed. We are in the process of procuring a patent, and think that it will have good commercial value once the patent is issued. Accordingly, we have put the operational aspect of the company in suspense, and are pursuing acquisition opportunities.  The biggest risk on this strategy is a failure to cut a deal followed by an impotent patent.

I never advocate simply closing the doors. If you are doing proper planning, you should see the problem coming down the road. There should always be something saleable about your company, even if it is less than a full recovery.

From the Coach’s Corner, Mr. Dimmer’s other tips: 

• “How to Attract an Angel Investor” – www.bizcoachinfo.com/archives/1367
• “How Investor Has Fun in Business and Technology” – www.bizcoachinfo.com/archives/1272

Five Tips to Generate Short-term, Long-term Sales

 

A reader writes:

Q: My sales were down in my small company last year and so far  sales are flat, too. Help? What can I do?

A: You can do plenty. Before you get hung up on social media and viral marketing, decide priorities. It takes time to tweet and blog. If you have to decide whether to see people in person or do the Internet thing, go personal during the daytime. Spend your evenings strategizing about the Internet. Go back to the basics.

Organization. What does your desk and car look like? Start and maintain a master to-do list and put papers away in a logical order. Calendars are great; otherwise use your list and update it everyday. Projects left undone should be moved to the following day.

Starting on Monday, you should review your day before shutting down each night. That means assess your performance at the end of each day and evaluate what you did well and what you could have done better. Then, review your plans for Tuesday. Follow this procedure each day.

By Thursday, you should develop an overview for the following week. On Friday, finalize your plans for Monday and so forth.

Regarding clutter, if you haven’t used a piece of paper for six months, ask yourself when you will need to do so. Get rid of unnecessary papers and post-it notes. Keep receipts for tax-filing purposes.

Never handle the same piece of paper twice, and prioritize. Handle all important tasks, and answer e-mails and letters promptly. Some details interfere with more pressing deadlines; put such reminders of those tasks in a “Priority B in-box”. Deal with those at the end of the day or schedule them for processing at a specific later time.

Avoid deadlines; they’re a huge time-waster.

The first hour of every day should be spent on tasks that you dread. If you handle unpleasant tasks first, the rest of the day will be a breeze.

Don’t let people randomize you. If they don’t consider your time and energy important, make sure they don’t. Don’t react to annoying people. First decide whether you need them to operate your business successfully. If you do, remember this mantra: “No matter what there are no big deals.”  Save your energy to enthusiastically serve your customers. And remember it’s never okay to get angry in business.

My important vendors who perform inadequately get a copy of my firm’s 60 ground rules for client service, 60 Ground Rules for Effective Client Service. I tell such people that I value them, but I inform them what I expect in the way of good customer service. If not, I quietly give others my business and I treat good vendors as though they’re valued customers or strategic partners.

Use filters in your e-mail so that they land in your e-mail in an organized fashion. If you’re a sole proprietor home-based business, beware: only use the automatic reply “out of office” if you don’t care if people know you’re away on vacation or out-of-town on business.

Exercise regularly. Even just taking walks will clear your brain and refresh you.

Set sales priorities. Review your branding slogan. Do you use a phrase of three to five words that tell your story? Mine as a business-performance consultant and columnist is, for example: “Proven Solutions for Maximum Profits.”

Develop benefit statements that best describe your features.

Devote at least 20 percent of your time each day to making sales calls on ideal prospects. If they’re busy, try again in a week. To lay a long-term foundation for growth, devote another 10 percent each day to marketing, networking or shameless self-promotion. In that way, you’ll be sure to line up business as projects expire.

Look for opportunities to express an attitude of gratitude and an attitude of service.

Without disrupting your profit margins, give customers unexpected 10 percent in added value. Regularly thank your customers in your routine e-mails and faxes, and send hand-written thank you notes via snail mail.

Prevent buyers’ remorse. A statement I use to prevent buyers’ remorse: “You’ll be very pleased with the strong results.”

If you make a mistake, flaunt it. It doesn’t hurt to use self-effacing comments that demonstrate humility. But avoid asking for forgiveness. You’ll find customers will laugh off your mistakes, especially if you are organized and efficient 99 percent of the time.

In a subtle manner, solicit compliments. When you receive a compliment, get referrals: “What are the names of two people just like you who would benefit from this product (or service)?” Don’t merely ask: “Can you refer a customer to me?”

Personal and business marketing. If you don’t have time to write a business or vision plan, set short-term and long-term goals after taking inventory. On a piece of paper, take an hour or two to list your strengths and weaknesses. Remember that every strength can be a weakness and that every weakness can be a strength.

For example, are you known for being assertive or do you occasionally go overboard in being aggressive? The ideal is become assertive. Think about what you say before you say it. Think about what to do before taking action. Remember the ramifications of each if you don’t.

Hone your strengths and alleviate your weaknesses.

Entertaining clients and customers. Pay for at least half the lunches. When the customer or vendor pays, be mindful of her/his budget and don’t order the most expensive meal.

Receivables. Send out invoices right away. If you bill by retainer, present them in-person to your clients each month.

Do customers take you for granted? If so, develop a strategy to inspire their confidence in you and your business. If that fails, start looking for prospects to replace them. If customers suffer from poor cash flow make certain they pay your bills before they pay others. Treat every communication as though it’s an event. Dress professionally and be on time. Make sure they know you appreciate the opportunity serve them.

Treat your bills to them and their funds as investments in their business. Keep all commitments. Prevent your customers from suffering negative surprises.

Remember, about 18 percent of Americans will only buy the cheapest products and services.  Such customers are not loyal and they’re prone to return products.

The other 82 percent of customers will spend more money with you and pay on time when they have five positive motivating buying perceptions about you:

• What customers think of you personally – are you prompt, organized and service-oriented?
• Image of your company – does it have a professional appearance?
• Product or service utility – customers want to know how they’ll benefit from you
• Convenience – can they reach you easily or conduct business without any hassles?
• Price – are your prices reasonable?

The bottom-line: remember to practice empathy and the Golden Rule. What goes around comes around. Oh, and now’s the time to focus on the Internet thing.  Good luck!

From the Coach’s Corner, be sure also to budget time to read for business and personal pleasure.

And send articles that pertain to your customers’ businesses: “When I spotted this article, I thought about you.”

Customers appreciate well-read businesspeople. In this way, you’ll become an invaluable go-to person.

 “Timid salesmen have skinny kids.”

-Zig Ziglar

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?