Have two Accountants

How often have you asked your Accountant a question about a particular deduction or scenario and they look blankly back at you? If this has never happened to you, chances are you are using an Accountant who consults as much as they practice Accounting. For the rest of us, using an economical Accountant means that we can only avail ourselves of the most basic of tax deductions/concessions available to SMEs.

For example, if you're in Australia and assuming your company is structured appropriately (another benefit of an Accounting consultant), you can access the Research & Development (R&D) concession which permits you to deduct 125% of your assessable income (up to 175% for longer R&D commitments). Other countries are sure to have a similar system in place to promote R&D and innovation.

Any work you plan on doing which will cost you money (more than AU$20k in a financial year), grow your products/services, but not directly attract income is likely to fit into the R&D category. By way of example, our company turns over between AU$500k and AU$1m each year and we spend between $50k and $100k (10%) on R&D activities. Our industry sector demands this of us. Applying the concession means our company would effectively reduce the taxable income by between $62,500 and $125,000! That would make a BIG difference to our annual profits. But alas, the company structure I established that was facilitated by my Accountant prohibits me from applying for the concession. The cost to restructure so prohibitive so we are unlikely to be able to access this concession ever. If only I'd spoken to an Accounting consultant before I had setup our company structure.

Another example: I am in the process of selling one of my companies (I have a few - don't we all!). My normal Accountant basically said that he couldn't help me and that, based on the company structure, we would be paying top tax rates on the sale price and would have Capital Gains Tax (CGT) and Stamp Duty liabilities. This would have resulted in a loss of 50% of the sale revenue in fees! Going directly to my Accounting consultant and presenting all the elements of the sale, I have been able to restructure the company and restructure the sale contract which has enabled me to reduce the 50% down to 5%. Granted the consultation and subsequent report cost me AU$5k and the restructuring work another AU$5k, but the cost was well worth the benefit (1,000% ROI to be precise).

I'm not suggesting dumping your Accountant; I'm suggesting you engage another Accountant to use as a consultant. This is how I use the two:

• Business Activity Statements, general taxation correspondence, company and individual tax returns are all handled by my standard Accountant.
• Change of company details for the Tax Office are handled by my standard Accountant.
• Questions about available tax deductions/concessions I direct to our Accounting consultant.
• Questions about the best company structure given a particular industry, particular Director's situations and particular exit strategy I direct to our Accounting consultant.
• Questions about structuring for sale or managing a sale, I direct to our Accounting consultant.

It is quite likely that, your Accounting consultant will be able to work with your standard Accountant to minimise costs for you (this is how my Accountants operate). The Accounting consultant will also be a Chartered Accountant so could theoretically implement all of the recommendations they suggest for you. However, their standard Accounting rate is likely to be much higher than your standard Accountant's rate. Therefore, they will generally be happy to guide your standard Accountant to implement their recommended changes. They'll know what should and shouldn't be outsourced to your standard Accountant but feel free to ask them about the Pros and Cons regarding any particular change they recommend.

Track all contacts with customers and suppliers

The purpose of this system is to keep a record of your contacts/experiences with each customer/supplier. Use a diary, Word document, Excel spreadsheet, database, I don't mind... just make sure it's easy for you to use and easy to review afterwards.

Tracking your suppliers

Anytime you call or visit them or engage their services, make a dated note of their performance. Nothing to advanced, just private notes to yourself such as "excellent and prompt advice", "avoid Julie, she's rude and grumpy", "never have a stock of those pens I like" or "really not very knowledgeable about tax minimisation strategies".

Tracking your customers

Anytime you call or visit them or they buy a product or engage your services, make a dated note of what was provided and how the transaction progressed. Nothing to advanced, just private notes to yourself such as "easy sale", "slow accounts department", "although they bought product X, these guys are probably better suited to product Y" or "would be a perfect customer for Y if we ever start providing Y".

Why track them?

There are quite a few reasons to document contacts with your suppliers/customers. Here are a few examples:

• You need to be able to review your perceptions of your suppliers when you are assessing whether or not to keep them as a supplier (see Performance manage their suppliers)
• You need to be able to review your knowledge of customers when you gathering customer feedback (see Actively seek customer feedback)
• You need to be able to assess your customers as leads for future business (see Setup a customers list)
• Your staff members are unlikely to be with you forever. You need to keep detailed information about your customers outside of your employee's heads.

Don't implement a CRM system

I'm referring to a full-blown customer relationship management system (referred to by most as a CRM).
Although I am a great believer and user of CRMs, I feel that you need 12-months using a simpler system (see Setup a customers list) before you invest in one. CRMs usually cost anything from AU$250 up to tens of thousands. Long before a CRM will deliver value, a simple customers list and tracking system (see Track all contacts with customers and suppliers) will give you positive ROI almost immediately. You can always migrate your customer data to a CRM at a later date.
There is just too much functionality in a CRM which can be quite daunting for anyone; even a technology-savvy person can struggle - trust me I know! I liken it to your first carpentry project, a saw-horse perhaps, when you need to draw a quick plan... AutoCAD is definitely overkill here. Perhaps after a few projects, once you are familiar and comfortable with the tools and techniques of the trade, you could start with a simple drawing program to 'assist' you to develop a plan that gives you access to features that you'll actually use. Going from nothing to a complete CRM implementation is overkill for an SME. You just won't get immediate value, and it is likely to negatively impact your ability to add to, or access, your customer data.
I'm suggesting that you should steering clear of a formal CRM initially. Feel free to trial one of the basic systems once you have setup your customers list and it has started providing some value. There's no point making the commitment to a formal CRM unless you get the process-side sorted out first.

When I refer to the 'cost' of the CRM, I'm referring more specifically to the time cost to learn the product rather than the dollar-cost of the CRM itself. Some vendors are even offering their systems for free (see New Breed Of CRM Software Designed For SME’s). I've spent hundreds of hours adding custom fields, developing custom reports and browsing the data in our CRM system and haven't spent a cent.

So when should you make the leap over to a CRM? Once your Excel spreadsheets, Word documents and notebooks start becoming unwieldy and making it difficult to follow-up leads and conduct customer surveys, you know you're ready for a formal CRM. Although not an exact science, I'd suggest once you've got more than 50 customers and/or more than 200 leads, the time commitment of a CRM will be worth it. Personally I've got around 50 customers and have 400+ leads in our CRM. I can now run a search for all customers who've not made a purchase in the past six months and generate a spreadsheet with their contact details in less than 5 minutes. This would have taken me hours if we'd still been using a simple customers list. However, when we only had 10 customers and 50 leads (and used an Excel customers list), it was pretty easy to scan the list and generate a targetted marketing lists in less than hour.
There are hundreds of functions I still don't use in our CRM, but the few I do use are well worth the time investment to get the system started and keep the data maintained. We also keep invoices in our CRM, duplicating our accounting system data to some extent, but this means I can run reports based on sales revenue; very handy.

Setup non-customers lists

Once you've setup your customers list (see Setup a customers list) you'll need to make a few more related lists. This are very similar to your non-suppliers lists (see Setup non-suppliers lists).

Same columns as the customer list, but with an additional column for notes/reasons. Make three of them; one for potential customers, one for lost leads and one for rejected customers. Anytime you talk to a potential customer, add them to the 'Potential customers' list and include any comments you like next to them eg. "look to be leaning towards us" or "probably better off with for this, but are a perfect lead for our product Y".

When a customer actually engages you, move them over to your 'Customers' list. If they decide to use someone else, move them to the 'Lost leads' list and include a reason why they went with someone else eg. "didn't end up purchasing anything" or " because of their industry reputation". How do you know what they've decided to do? Simple: call them and ask. If they haven't made a decision yet, ask for their permission to call them again and agree on a timeframe. Then call them when you said you would. This also gives you a good opportunity to find out if they have any questions/concerns that you can address to assist them with their decision-making.

The last list is for 'rejected customers'. Yes, I'm serious, these are the customers that you don't want to do business with (foreign thought for most of us!). There are many reasons, but the important thing at this stage is to know that it is bad business to supply your products/services to every single company/person who is in your target market. There is always at least one company/person in your target market who is not suited to you. You are never that desperate for work that you need to sell to these folks; even if they want to buy from you. Not sold? Ok, you can leave this list alone... for now... but it'll be back.

Setup non-suppliers lists

Once you've setup your suppliers list (see Setup a suppliers list) you'll need to make a few more related lists.

Same columns as the suppliers list, but with an additional column for notes/reasons. Make three of them; one for potential suppliers, one for rejected suppliers and one for previous suppliers.

Anytime you talk to a potential supplier, add them to the 'Potential suppliers' list and include any comments you like next to them eg. "sounds like they know what they're on about". This list is the basis for all further lists ie. all suppliers should start on this list. The ways a supplier can move between the lists are as follows:

1. When you actually use a supplier, move them from the 'Potential suppliers' list over to your 'Suppliers' list.
2. If you decide to use someone else (as opposed to the supplier on your 'Potential suppliers' list), move the overlooked supplier to the 'Rejected suppliers' list and include a reason why you went with someone else eg. "not as polished as the opposition" or "don't really have an SME focus".
3. If you never use a supplier on your 'Potential suppliers' list, just leave them on the list - no harm.

Don't pay invoices blindly

Don't pay an invoice until you know you have got what you've paid for. Ok this is pretty obvious if you're in a retail shop buying a printer, but it can be a bit more challenging in terms of things that get delivered to you.

Be particularly wary if your supplier asks for part-payment for a product or service but won't clearly articulate this on an invoice. Make sure that, if you are going to pay before you get something, that the invoice clearly stipulates the exact details of the product/service and include Terms and Conditions for a refund, should the product or service not meet your expectations.

Its a lot harder to get back money you've paid than it is to not pay for something in the first place. Say for example that you send an order to a supplier, they send you an invoice, you pay it and then the item is shipped to you. But the item that arrives by courier is a different model to the one you bought. In these situations its very important that this is noted at the time it arrives and that you don't accept the delivery.

To ensure you don't get stuck with something you didn't want, make one person responsible for receipting goods and ensure that they check every good against the order/invoice details before they sign for it.

Make sure that, any time you have 'an incident' related to the above, that you make a note of it against the supplier (see Performance manage their suppliers).

Share their suppliers list

Its a good idea to share your 'Suppliers' list with other SMEs in your network (see Setup a suppliers list).

Perhaps avoid sharing your 'Rejected' and 'Previous' supplier lists and definitely avoid sharing your private comments log. You don't need a defamation law suit.

If you share your list on a regular basis, your network will get the idea when your Marketing supplier changes from one revision to the next.

The list will also be a valuable tool for your staff members as you grow. Its often hard to communicate how you like doing business (and who you like doing business with), and this knowledgebase will assist in communicating your likes/dislikes to your team.

Performance manage your suppliers

Not all of the suppliers who made it onto your Suppliers list will stay there forever (see Setup a suppliers list).

They have to 'deliver the goods' on each and every conversation and engagement. Be tough on them; after all, your customers will be tough on you. Suppliers should only remain on your list if they consistently deliver high quality products and/or services.

If you like, set some Key Performance Indicators (KPIs) against which all of your suppliers will be rated eg. SME understanding, efficiency, estimate Vs cost accuracy. Then, say on an annual basis, sit down and review your supplier activity logs against the KPIs together with your account details of spend with them, and start culling!

To be fair, I suggest that you call and discuss your concerns with any SME suppliers who are performing marginally before you dump them and give them a chance to repent (see Actively seek customer feedback), but it's entirely up to you.

On the other hand, if you have a supplier who has consistently met or exceeded your expectations/KPIs, be sure to call their Managing Director and let them know (just think about how good it would be if your customers volunteered positive feedback!).

Setup a customers list

This post relates to SMEs who can answer "Yes" to all (or nearly all) of the following questions:

1. I have products/services that are rarely sold without some sales effort
2. It is logical, to me, that my customers maintain an ongoing relationship with me
3. My customers could benefit from 2 or more of my products/services which are not always purchased together
4. Related areas of business exist for which I have a business partner that I refer customers to or that I could consider moving into myself (it should be hard to answer "No" to this one).

If you answered "No" to any of the above questions, it is less likely that you'll get a positive Return On your Investment (ROI) from following this post. The more "No's", the worse your ROI will be. I'm not saying there won't be some value; its just not as beneficial to you as it would be to other SMEs. Maintaining a list of everyone who has ever bought something from you, is of minimal value. I am suggesting that a customers list is extremely valuable where you have an ongoing relationship with your customers or you could possibly sell something else to a customer in the future. This is not just a marketing list that you send flyers to on an annual basis; it is so much more...

The actual list

A good starting point is a Word document or Excel spreadsheet (again I recommend making the leap over to Excel because you can turn on sorting and filtering - my favourite, easy-to-use Excel feature). The important things that you'll want to include about each customer are as follows:

• Customer type - what industry (or target market) they're in
• Customer company name (if not an individual)
• Key customer contact name
• Address - physical
• Address - postal
• Phone number - Office
• Fax number - Office
• Phone number - Key contact
• Mobile number - Key contact
• Date of first purchase
• Date of last purchase
• Date of first contact
• Key contact name - within your company

Why keep a list?

So what's the point? Assuming your following a basic sales process...

• For every 10 people you talk to about your business, 1 will become a prospect/lead
• For every 10 prospects/leads, 1 will be converted to a sale.

That's 100 people you need to talk to to get a sale. Even if this is exaggerated by a factor of 10 for your industry (probably unlikely), that's still 10 people that you've spent time with to get just 1 sale. You've already convinced each one of your current customers that you are/were the right person for the job. You know they have made the "buy" decision once already. This means that they have probably talked to at least 2 other suppliers (ie. your competitors) and chosen you. If you have another product/service that targets their needs and they have the appropriate authority/funding/desire, all you need to do is communicate with them. The probability that they will buy, or at a minimum be the 1 out of 10 people that becomes a prospect is very high.

Why not just wait for them to remember you next time they need a similar product/service? The reality is, they may not remember you at all. Depending on the size of the previous purchase and time since it occurred, they may have made numerous other purchases or you may have moved into an area that you didn't service when they last talked to you. So its up to you to use and reuse your customers list to find likely prospects (rather than cold-calling) and communicate to your customers the current status of your business.... that you're still in business for one, but more importantly what else you have that they may want or what else they need they you would consider providing.

Another reason to setup a customers list is to support your customer feedback process which frankly doesn't work very well unless you have an up-to-date customers list (see Actively seek customer feedback). Combined with some basic sales information from your invoicing system (or shoe-box), a customers list with a contact register will give you the makings of quite an effective customer feedback system.

Related posts:

• Not implement a CRM system
• Track all contacts with customers and suppliers
• Setup non-customers lists.

Setup a suppliers list

Over the years I've needed to engage a lot of suppliers to either support or improve my business. Every SME needs the basic necessities such as an Accountant, office consumables supplier and telecomms provider. You're unlikely to forget these providers.

However, there are often more obscure needs such as a Contracts or Intellectual Property Lawyer that you may need to engage on an ad hoc basis. You could keep a pile of business cards, but in my experience, you tend not to remember who didn't return a phone call or who provided poor advice 18 months ago. You could throw away the business cards of these 'black-listed' providers, but you are throwing away valuable corporate knowledge.

For example, you may accidently re-engage one of these 'rejected' suppliers when you find their beautiful 1/4 page ad in the local paper and not remember your past experience with them until it's too late. So I strongly recommend you make a simple list. I suggest in table format using either Word or Excel (recommended because you can turn on sorting and filtering).

The basic supplier list components are as follows:

• Service type
• Supplier name
• Key contact name
• Address - physical
• Address - postal
• Phone number - Office
• Fax number - Office
• Phone number - Key contact
• Mobile number - Key contact
• Website.

If you've read my post on outsourcing (In My Humble Opinion, SMEs should... Outsource non-core activities), your list will grow pretty quickly in the first few months.

Related posts:

• Performance manage their suppliers
• Share their suppliers list
• Track all contacts with customers and suppliers
• Setup non-suppliers lists.

Outsource non-core activities

So you've just started you business and things are going great. A lot of customer-to-customer referrals (the best kind of advertising), and customer numbers are growing at a steady rate. But then your work PC crashes, the receipt shoe-box overflows and you realise that your 3-line ad in the local paper hasn't delivered any new customers. You could spend the next week rebuilding your PC, cataloging the shoe-box and reading a few marketing books... but I suggest that this would be a complete waste of your time. Your core business is what you should devote 100% of your time on.

Although it may appear 'economical' to spend time sorting out these problems yourself (I know, I've said to myself "I'll just do it after hours, and it's free!"), the reality is that unless your core business is PC repair, book-keeping or marketing, you're going to spend a lot more time (= more money) than a professional would to resolve the issues.

Any time you have decided to allocate to your business should be spent on the core products and services of your business. You don't need the distractions (or frustration) of non-core aspects of your business that aren't an area of specialisation for you. Remember, the whole reason why you're in business is to do something you're good at (eg. efficient, effective, economical, etc.) for someone else who is either not skilled in this area, or would simply want it done more quickly or economical than doing it themselves. So you are basically asking your potential customers to outsource something to you. It therefore makes sense that you extend this logic and become a customer yourself by outsourcing whenever it is appropriate.

I'm not saying outsource strategic planning and quarterly financial reviews, and I'm definitely not saying that you should outsource customer feedback activities (see Actively seek customer feedback). I'm suggesting that someone whose bread-and-butter is solving a particular problem for other businesses, is probably going to be good at it, efficient and economical (as your customers expect of you). My current rule of thumb is, if it isn't my core business and I don't think I can do/solve it in less 4 hours (10% of a normal [hah!] work week), I'm going to spend 15 minutes in my contacts/suppliers list, the local paper or yellow pages and find a supplier who can do it for me. Chances are you will have a similar problem again, so you can also evaluate them for future use (or avoidance).

My 'top 3' picks for things all SMEs should outsource immediately are as follows:

1. Website development
Ok I'll admit it, I know little to nothing about marketing. I looked at getting someone to build a website for my company, but the costs were crazy. $2,000 for a single page(!), $10,000 for a complete site with several products/services pages, a forum, feedback area and blog. Are these people crazy? I'll do it myself I said. The end-result of perhaps 100 hours of my time looking at other sites, reading up on HTML, reading small business marketing books and publishing 5 pages of content was a set of totally ugly, boring and static web pages. If you're in a professional services business (as I am), and are charging say $100/hr (conservatively) to your customers, that equates to a minimum $10,000(!) spent developing a crap website. Perhaps you don't have $10,000 for the complete package, but I strongly suggest you save up the $2,000 and get a professional to create your initial 'web presence' for you. They will probably offer add-ons at a reasonable rate so you can extend your web-site as money becomes available (and as the return-on-investment of the site increases). A lot of the larger web-hosting firms also offer monthly payments that include the hosting charges and the site development costs as a package. Fantastic for us SMEs!

2. PC support
I love PC problems. especially when I'm procrastinating; avoiding working on an assignment or finishing off a painful project. It can literally take days to solve a problem. Great! If you have a few PCs, you can get really carried away with installing updates and new software, upgrading the hardware, configuring printers... the list goes on. No, I'm not qualified or have any professional experience/skills, I just enjoy it. I once looked into getting someone to come in and do this work for me, but the costs were a little scary ie. $50-75/hour and I wasn't sure if they'd take me for a ride. However, my logic was wrong. I'm actually losing money here. I should be focusing on billable hours. If it takes me 2 hours to find a problem and fix it, that's potentially $200 lost income and only $50 saved (logically assuming the outsourced provider can solve the problem in a lot less time). Ok, you may not have any billable work, but you definitely have more important things to do. So outsource your PC support. If you've grown to a size that justifies a server and a collaboration tool, you'll definitely need someone to help set it up and maintain it.

3. Book-Keeping
Back to the 'shoe-box'. Another thing I just don't get is accounting (I know, the list is building!). I can understand our Profit-and-Loss statement and acknowledge the importance of positive cash-flow, but ask me to record our invoices and purchase receipts in a debit or credit column and I'm stumped. If it wasn't for my wife, I'm sure I would have been audited by the Tax Office and closed down long ago! Book-keeping is big business (there are thousands of book-keepers out there and quite a few franchises), but it's also good business sense. You can literally hand them your shoe-box and bank account on a monthly/quarterly basis and they'll make sense of it all, balance your bank account and get it all ready for your Accountant to process or even prepare your Tax Office submissions for you. You could always use your Accountant as a book-keeper, but the costs would be quite high - unless they offer a specific book-keeping service. As you grow, they can suggest an accounting software package, can set it up for you, enter all your data and give you training in how to do simple data entry and reporting. Fantastic service and, with the large number of providers, quite economical ($40-75/hour - 1/3 to 1/2 the cost of an Accountant).

Related posts:

• 2009-04-12 - Just found this complimentary blog post on SME outsourcing of IT: http://www.evolveit.com.au/blogs/claytonm/2009/02/give-time-back-to-your-it-guy.html
• 2009-04-22 - Another complimentary blog post on Virtual Assistants: http://www.sme-blog.com/small-business/virtual-assistants/outsourcing-options-for-small-business
• 2015-04-16 - Another interesting article on the possible demise of book-keepers and accountants: http://www.smartcompany.com.au/technology/46462-are-the-days-of-bookkeepers-and-accountants-numbered.html

Actively seek customer feedback

I know, asking for feedback feels as stupid as asking for a smack in the face. Unfortunately there is no better way to find out what you are doing well, what you are doing poorly and what you should be doing. You'll be surprised at the results.

Firstly, my 'top 10 list' (11 actually) for customer feedback:

1. Do it personally - Either in-person or over the phone.
2. Talk to all types of customers - active customers, lost customers and dead sales leads.
3. Use structured questions and write down the answers - You need hard data.
4. Prepare for each customer call - sales, support calls, complaints, etc. in the period.
5. Cover off on all aspects of your business - don't just focus on your core product/service.
6. Do it regularly - Annually at a minimum.
7. Summarise and analyse the results - A quick report is best.
8. Compare your performance with previous rounds - you need a sanity check.
9. Provide feedback to your customers on the results - good/bad, doesn't matter, do it.
10. Change the way you do business as a result - that's the whole point!
11. Do it on an adhoc basis as well - as soon as you lose a customer or a lead, find out why.

1. Do it personally
I'm amazed at the number of times you get a phone call from someone, just after you get off the phone with a service desk, asking for your feedback on 'your experience with our service desk'. This person is usually disinterested, desperate to get of the phone as quickly as possible and uncomfortable when you start going into too much detail. They are never in a position of authority in the company. You'll be surprised at the response you get if you call one of your customers and say "Good morning, my name is X, I am the Managing Director of Y and I am calling to seek your feedback on my company's performance". Don't offload this to your administrative support staff (fight the urge) - it just isn't as effective. Don't send out a form and ask your customers to complete it (unless they specifically ask for one). The response rate will be terrible and you will get a biased view of your performance (as only seriously unhappy or bored customers will respond). If possible, have a face-to-face meeting with your bigger customers and only use the phone where it isn't practical to visit them. Of course if you're running a lolly shop, scale down your whole approach accordingly :-).

2. Talk to all types of customers
Its tempting to only call your current/loyal customers. In general, they will definitely have nicer things to say than a recently lost customer or someone who decided to 'go with the opposition'. However, some of the most valuable information will come from lost leads and recently lost customers. Perhaps start with a few of your current customers (to get into the swing of things), move on to the lost leads and lost customers and then finish with the remainder of your current customers. Pace yourself, this is tiring business.

3. Use structured questions and write down the answers
You need a plan. A consistent way of approaching each customer. Its amazing how side tracked you can get when, in response to you introducing the reason for your call, the first thing the customer says is "You're not going to like what I have to say!". I have developed 3 different sets of questions on separate forms for each customer type (as per point 2). I use a Microsoft Word form so I can type their answers directly (my handwriting is atrocious). If you don't write it down, you will forget something. The customer's don't mind the formality (they may even expect it). They appreciate what you are trying to do and will give you time to write down their responses and find your next question. I use a telephone headset (borrowed from our service desk team) as it leaves my hands free to type or write things down.

4. Prepare for each customer call
Before you actually make contact with a customer, get together your 'experiences' with that customer in the report period (usually the last 12 months). You will need products/services used, sales figures, details of support calls, customer complaints and, if you keep them, details of all contacts with them (I mean phone calls, meetings, e-mails... everything - from any of your staff to/from any of their staff) in the period. If you don't have all of these items (or any of them for that matter!) prepare yourself mentally as it will be like riding a roller-coaster with your eyes closed.
Note: You should probably think about setting up a customers list (see Setup a customers list) and a contacts register (see Track all contacts with customers and suppliers) if you don't have all of the listed items for every customer.

5. Cover off on all aspects of your business
You will be tempted to focus on your core products and/or services. These are important, however you may have problems in your accounts department (ie. your wife/husband!), with your fax/e-mail service or staff professionalism/appearance that you don't know about. Have some structured questions about these secondary aspects, but also have some open-ended questions to catch any feedback that you were perhaps not expecting.

6. Do it regularly
I suggest annually. Honestly, I just don't have the energy to do it any more frequently than that. However, if you want to do it quarterly, go for it. Just make sure you have time to actually change things before you speak with the same customer again. I must clarify that, by regularly, I mean how often you do a customer-wide feedback gathering exercise. Any time you lose a customer, lose a lead or receive a complaint, you should kick off a formal feedback session with that client to ensure you have all of the relevant information.

7. Summarise and analyse the results
At a minimum, make sure you actually read through all of the responses and digest the information presented. Next best thing to do is give the information to someone slightly removed from the business (eg. your wife/husband) and get them to highlight anything they think is significant. By far the best way to summarise the results is to put together a quick summary report. The report should provide a main section for each area (ie. Products, Accounts, etc.) and have a sub-section for each question. Each question's results should be graphed or summarised somehow with a brief summation of overall performance eg. In terms of product X, our customers are generally satisfied. Each question should also provide an action plan in response to the results eg. As a result of this feedback aspect X of product Y shall be redeveloped in the next period.

8. Compare your performance with previous rounds
You need to firstly make sure that anything that has been working well, and received positive feedback in the past, is still working well. Hopefully this will be the case, but if performance drops, look at anything you've changed since the last round of feedback and see if it has caused a a drop in customer satisfaction in this area. Sometimes you'll make a change for one reason but inadvertently create a problem in another area. This is also a good sanity check to see if the changes you made to address unacceptable performance in a previous round has solved the problem.

9. Provide feedback to your customers on the results
Ok this is on par (in terms of pain) with actively seeking customer feedback in the first place. Firstly, everything must be de-identified, generalised and preferrably this feedback should be provided verbally (to minimise the possibility of this information getting into the 'wrong hands'). On the upside, it will demonstrate to any disgruntled customers that they are the exception rather than the rule. On the down-side, you will be openly presenting problems with your business. This actually demonstrates integrity and loyalty to your customers. They will thank-you for it with their loyalty in return. As long as you move on to 10 (below).

10. Change the way you do business as a result
The whole concept of seeking customer feedback is to improve your business for the purpose of strengthening current customer loyalty, improving customer retention and improving your ability to transform leads into sales. This means that you will actually have to change some aspects of your business to get any return on investment from the customer feedback process (which can be quite time consuming = costly for you). Hopefully you're generally doing ok but just need to work on some aspects. Alternatively, if the outcome is a general consensus that you're hopeless, perhaps its time to review your business in more detail.

11. Do it on an ad hoc basis as well
Here's an example why. I recently hired a lawn-mower-guy to mow the grass, trim the hedges, do the weeding, etc. He had a pretty good service model whereby you pay a fixed monthly fee and you received 2 mows, 1 hedge trim, 1 weeding and 1 fertilising each month. The first month was fantastic. The yard never looked better. However, in the second month, he only mowed once and I didn't see him again that month. Yet, sure enough I received the standard full monthly fee. I immediately called and said that I didn't need him anymore, however he didn't ask why, and I didn't explain. If only he'd asked, perhaps he would have realised that he'd lost me as a customer as a direct result of his inability to deliver on his brand promise. I wonder how many other customers he's lost as a result of the same thing? He'll never know.

In general, I find that I expect worse feedback that we actually get. As I know how the 'machine' is operating behind the scenes, I think the customers will see through our customer service approach. This is always a pleasant surprise. However, without fail, I learn something about my business that I didn't know before. Sometimes it is an area for future growth (eg. a new product or service that my customers are crying out for) and sometimes it is an unexpected acceptance by my customers of something I'd thought they'd all hate (eg. increased pricing, or reduced services to remote customers). But the point is that I'd never had known if I hadn't asked.

I hope this has helped you understand the importance of implementing and maintaining a formal customer feedback process within your company. If it has, please drop me a quick note. If not, please let me know why and feel free to disagree with post.

You're not alone

In this, my first post, entry I want to provide some comfort to those of you "in the trenches". You are not alone. No, I don't mean aliens could invade the planet at any time (although this is plausible), I mean that there are literally thousands of small businesses in Australia who are all struggling to come to grips with running a small-to-medium-sized enterprise who are just like you.

That's what an SME is by the way; a Small-to-Medium-sized Enterprise. Why the term "small business" lost favour with the World, I'll never know, but it does make me feel special being able to refer to myself in the third person as "an SME". Try it. Don't say it as a word, spell it out, or your new found lingo might backfire before you even get going! I tend to alternate between referring to my company as "a small business" or "an SME" depending on the environment. I highly recommend you do the same whenever the actual purpose of your business is not important, or you want to keep it confidential ie. you don't always have to say "I'm a fence builder" when you meet a stranger for the first time.

I'm not saying that you're not unique (you are!), these other SMEs I'm referring to are probably not in the same business as you, making and selling timber clocks at the local markets for example, but they all have many things in common with you. Honestly, I could, and often, ask other small business owners what they are struggling with and the answers of "cash-flow" and "finding new customers" are almost always in the top 5. Book-keeping is also another pain-point. Unfortunately the research points to other problem areas of our businesses that we are often not aware of until its too late and we find ourselves closing down (as so many of our colleagues have done before us). No matter the researcher, they almost always include poor business planning, poor marketing and poor sales. Far from buzz words, "business planning", "marketing" and "sales" are but a handful of fundamental elements (of which there are many) of a successful and sustainable business.

What I'm trying to introduce here is my commitment, as a fellow SME, to helping you. There are thousands of other SMEs out there, but a lot of them are too busy trying to keep their own businesses afloat; let alone spend time providing advice or guidance to others. At present, I've been blessed with time... time to reflect on my own business, future business prospects and to consider what advice I'd have given to myself over the past 3 years since establishing my first company (assuming I'd been humble enough to listen at the time).

I hope that the advice I give is useful and practical. If it isn't I'm sure you'll let me know! However, if it is, it would be great for you to comment accordingly - showing others that you agree and support what I've said. This will hopefully provide validation to what I've written and ensure that new readers of my blog will know that I'm not just a crazy man.