Tips for Startups

Congratulations — you have an idea for a potentially lucrative small business. All you need is the funding. Several avenues are available, and you should take the time to explore them all before deciding what's best for you.

In case you missed the emphasis, the operative word there is best. With that in mind …

1. When evaluating financing options, remember that it's not always about the interest rate. Terms and conditions matter quite a bit. Even as a C corp, S corp or LLC, you can lose what you've invested, and you may be asked for "personal guarantees" that will entangle you long after a business fails.
2. Match the duration of your financing with the duration of your assets. If you have two-year loans with a big balloon payment at the end and you can't roll your debt in two years because of a major recession, that's a big problem. Ever hear of Lehman Brothers? Yeah, they did that.

Disagreements with employees, clients, and independent contractors can create risks for your small business. By having certain employee and contractor documents in place, you can help safeguard your company.

Here's a quick look at some of those key documents:

• 1099s: Make sure your paperwork is in order before January, when 1099s are due.

• Employment records: Organize your employee records (e.g. applications, performance reviews, W-2s, non-compete agreements) and keep them in a central location. Plus, confirm the records for each employee are complete and up-to-date.

• Employee handbook: This is an important document for your business and will help you avoid potential employee issues. It should lay out expectations for your employees in detail and include your mission statement along with your anti-discrimination and anti-harassment policies.

Many business owners think of a budget as a limitation. Instead, they should think of it as a set of guidelines.

The purpose of a budget is to identify the points at which you need to implement various contingency plans. And the process isn't necessarily restrictive; a budget prepares you to react not only when something bad happens, but also when something good does. If you find that a competing company is unexpectedly for sale, for instance, can you adjust your budget in order to buy them out?

You Can't Do the Math Without the Numbers
For a small business, creating a budget shouldn't take more than a couple of hours, and the benefits are tremendous. If you're doing it right, it forces you to consider the financial metrics that are actually driving your organization. Where is your company, and what can it achieve in the next year? Or three years? Or five years? What steps do you need to take during the next several months to get started toward those goals?

Once you've set your annual budget, you need to reevaluate at least once during the year to determine where you are relative to your projections. That simple process can make your company proactive rather than reactive.

Do you have a new business that shows promise or an established business that's having a growth spurt? Either way, at some point you'll probably wonder whether an infusion of cash could help you reach that highly desirable (though difficult to define) "next level."

Getting Your Priorities in Order
As a first step, make sure your records are organized and up-to-date. A number of bookkeeping issues, from misclassified expenses to improperly applied COGS, can jeopardize your loan application.

The key reports and documents you’ll typically need to provide are:

• Current P&L: This represents your revenue minus your operating expenses for a given period of time. If it's a negative number, then a loan won't fix your problems.

• A balance sheet: I covered this one in an earlier post. Basically, the balance sheet is a snapshot of your company's liability, assets and capital on a specific date.

Two years ago, I blogged about how outsourced bookkeeping services can help you keep your financial records up to date and enable you to avoid filing for an extension on your business tax returns. With the September drop-dead nearing once again (this year it's September 17 instead of September 15), it's a good time to revisit the topic.

Putting the Tension in Extension
The deadline extension exists to give businesses a break in the event of unforeseen circumstances. For example, if a natural disaster impacts the business or a personal health crisis affects a key employee just ahead of the March 15 deadline, it would be unreasonable for the IRS to fine the business for filing a late return. (To be clear, we're talking about small businesses that are structured as partnerships or S corporations. Note that the Final deadline for C Corporations and individuals (with extension) is October 15, 2018) An additional six months ought to be ample time to resolve any issues.

Originally posted on the Bill.com blog.

You’d like to think your business is safe from fraud. But there are many, sneaky ways that those with ill intent — both inside and outside your organization — can take advantage of your company.

But, by noting the below risks, you can begin to plug any leaky opportunities for fraudulent activities.

Using paper checks
According to this survey of finance professionals, three out of four businesses were victims of check fraud and check forgery in 2016. Yes, you read that right. Seventy-five percent of businesses have been subjected to financial crimes.

The true culprit? Paper checks.

Those little pieces of paper give fraudsters everything they need to steal your money — account number, routing number, and even your bank and address. It’s like handing burglars the key to your house.

In 2009 Steven Conyers acquired a CMIT (Completely Managed Information Technology) Solutions franchise in Brooklyn, New York.

Demand for his franchise’s services, which range from IT troubleshooting to data security upgrades, grew steadily. So did the demands on Conyers’ time. Desktop-based bookkeeping, which lacked real-time functionality or integration with his project management platform, was a particular drain. Supporting Strategies found a solution.

More Time — and No More Fines
Although he had an outside accountant, Conyers still had to input much of the bookkeeping information himself. He often fell behind, which proved costly. "Like most franchises, we have to report on a monthly basis," Conyers says. "I was reporting late, and the fines were costing me money."

Originally posted on the Bill.com blog.

You love your B2B business — building it, adding new products and services, growing revenue.

And, most likely, winning new customers.

For most companies, the sales focus is on prospects. When new customers come on, they bring money, prestige, and great numbers to share on quarterly reports. But you still have to build trust, deliver as promised, and work to retain their business beyond the honeymoon stage.

Never forget that you already have a built-in source of contacts who trust your company and what it does: Your customers. And you shouldn’t overlook selling to them.

Studies show that it costs five times more to get new customers than keeping existing ones.

Another asserts that growing customer retention by 5% can lead to a 25% increase in revenue. Finally, this book discovered that the probability of selling to a new prospect is 5%-20%, while the chances of selling to an existing customer are closer to 60%-70%.

This is the second article in our three-part series on Client Delight. Click here to see the first article, "Why Client Delight Is Critical to Your Business."

Too often, we learn our clients are disappointed only after it's too late. After all, even the closest client relationships don't always offer up the information needed to measure client satisfaction.

The good news? Getting that information isn't as difficult as it may seem. While technology and social media have reduced business owners' control of the message, they've also provided new ways to assess Client Delight. The key is taking a multifaceted approach that includes a range of tools and strategies.

Surveys help you understand how you're measuring up in a client's eyes.

• Create quick surveys that take only two to five minutes to complete.
• Send exit surveys to clients when a project is coming to a close (e.g. if you're a landscaper wrapping up a one-time job with a client).
• Schedule bi-annual surveys for clients with whom you have an ongoing relationship.
• Always follow up on negative survey feedback as quickly as possible to salvage the relationship, if possible, or at least stem the tide of negative word-of-mouth.

This is the first article in our three-part series on Client Delight.

Client Delight is all about exceeding client/customer expectations and fostering long-term relationships. When done well, this strategy can boost referrals, increase revenue and set your business apart. HubSpot pushes the concept even further, making the case that client delight is about pleasing not just existing clients, but also potential ones, at every opportunity and brand interaction.

Focusing on Client Delight is much more than the marketing trend of the moment. In fact, mastering Client Delight might make the difference between seeing your business fade or flourish. We even have the data to prove it. Research shows:

• It's 50% easier to retain an existing client or customer than it is to attain a new one.
• It costs between five and 30 times more to attain a new client or customer than to retain one.

Those numbers make a compelling case that ignoring Client Delight can do significant damage to your company and its brand.