Get Your Free Goodie Box here

The Ultimate Small Business Playbook by B2B CFO® - HTML preview

PLEASE NOTE: This is an HTML preview only and some elements such as links or page numbers may be incorrect.
Download the book in PDF, ePub, Kindle for a complete version.

Make sure they know that if they work here, they do as they are told, and that they are

simply a replaceable set of hands to get the work done. Results: anxiety, depression, anger,

bitterness etc.

4. Instruct. Give your team brief instructions and an impossible deadline. Tell them it needs to be done in six weeks no matter what, and you’l want an update tomorrow. Results: Anger,

depression, confusion, hopelessness, low morale, minding…

5. Fire at will. One of your employees is not doing her job, being distracted and casting a black cloud upon the other employees. Don’t listen to excuses, or waste time in counseling a

previously good employee. Fire her. Don’t explain to your employees what happened –

they’l just know that you do not tolerate poor work and bad-mouthing and they’l never do

it because they fear getting fired. Results: Need you ask…

6. Conspicuously Consume. Have the repair bill for your Ferrari faxed to the office fax. Charge

the cigarette boat mooring fees to the company for entertainment. Have your book-keeper

take care of the Monte Carlo condo bookings. Results: Why do you need to ask…?

Copyright © 2012 B2B CFO® 25

The Ultimate Small Business Playbook

It’s hard to be a boss, but even harder to be an encouraging leader. Many studies prove a

positive correlation between great business results, increasing company value and high

employee morale. What’s your choice, boss?

A CFO’s Advice for Managing Personal Finance

CFOs spend their time helping companies build value and there are many tried and tested ways

to build wealth in an organization. Here are 6 ideas from the world of Corporate Finance to

help build personal wealth.

1. Match your Loan to Asset Quality How can you build wealth? Take a look at your mortgage.

Most homeowners take out a 30 year mortgage, but the true cost of making payments over

that length of time can be paying nearly two-and-a-half times the purchase price of the

home. A 15-year mortgage instead of a 30-year mortgage can potentially save you large

sums of money and help you build wealth.

2. Maintain Internal Controls You have to be involved in your day-to-day family finances, or

you may be putting yourself at risk. If you let your spouse pay the bil s and manage the bank

accounts, what happens if your spouse dies or becomes seriously il or if you divorce? Don’t

turn financial affairs over to a broker or financial consultant without staying informed about

investment decisions.

3. Effective Cost Management All those coffees and lunches are like small leaks in your

wallet. If you’re ever going to accumulate wealth, you must control spending leaks. You

know what happens when small leaks are left to grow. Continuously review your expenses

for potential savings.

4. A Strategic Plan Building wealth requires a financial plan. Write down vivid goals like early

retirement, paying off your mortgage. You are far more likely to get there if you have a

map.

5. Debt Management Some debt can help you, but Credit cards are dangerous and you can

quickly end up running in place as you pay interest but never bite into principal. A $1200

wardrobe can end up costing you $2,400, but you’ll never realize it because the true cost is

hidden in your credit card payments. Try to pay cash and stay away from credit card debt if

you want to accumulate wealth. Have a 24 hour rule on major purchases – chances are you

will decide not to go ahead if you wait a day.

6. Having an Exit Strategy It’s easy to postpone saving for retirement, but the earlier you start the faster you will accumulate wealth and save for retirement. Consider that the amount

you need to save will be much lower if you start now and give your earnings time to

Copyright © 2012 B2B CFO® 26

The Ultimate Small Business Playbook

compound. If you’re over 40 and you’re behind on your retirement savings, you’ll have to

save much larger sums to ever catch up to where you should be. Start saving early, and save

at least 10 to 15% of your income, and you’ll be well on your way to accumulating

wealth. More than half of all workers wil end up cashing out their 401Ks when they change

jobs. Stil others wil take out loans, permanently reducing the retirement fund they could

have built up.

Preventing Fraud in Small Companies

Embezzlement is not just happening to rich investors, and is arguably rife in small growth

companies. So how do you protect yourself against dishonest employees? If you ever read up

on fraud practices, which I do, then you know there are a dizzying array of potential ways you

can be ripped off. In turn, the professionals prescribe hundreds of “simple” procedures,

controls and protocols to help you head them off.

However, in the real world business owners have limited resources, they have to place trust in

individuals, and they need to devote the bulk of their time to growing and building value in

their business. So here’s a list of fraud checks you can work on right now.

1. Procedures Manual: Develop a simple accounting procedures manual that lays out duties,

responsibilities, and processes? It does not have to be elaborate, but a published policy

makes it harder for employees to disguise bad procedures, or hide transactions.

2. Oversight: Practice a regular oversight process to identify potential areas of fraud. Review

the customer and vendor lists to check for unknown or similarly listed names; review the

monthly payments register and check for large amounts, small regular amounts, unknown

vendors etc.: and insist on timely bank reconciliations.

3. Outsource Payrol : Use ADP, Paychex or others to do your payroll processing. There is more

opportunity for fraud with internal payroll – and it’s a waste of book-keeping time. Even

worse you wil be on the hook if the government goes short to pay for your accountant’s

second home.

4. Insist on timely and accurate financial statements, and have your accountant explain

monthly variances in profit margin and overhead amounts. Look at your balance sheet and

ask for explanation of Asset and Liability balances with generic names.

5. Observe the signs: It’s a cliché that the devoted employee who never takes a vacation is

likely on the take, but there are other signs you should look for. Signs such as extravagant

lifestyle, lots of pay advances, creditor calls at work, unusual changes in habits or behavior,

sloppy work habits, more sick time, lots of overtime, evidence of drug, alcohol or family

issues. These could all be evidence of personal turmoil leading to fraud.

Copyright © 2012 B2B CFO® 27

The Ultimate Small Business Playbook

6. Credit checks: run occasional credit checks on key employees – permission should already

be on file – and look for changes indicating financial pressure.

7. HR Policies: Makes sure employees are aware that fraud is not tolerated and that guilty

parties will be prosecuted. Make employees aware that suspicious activity can and should

be reported.

If you have an inventory business then there are further measures you may need to take to

control high value merchandize and materials. Of course, one of the best investments you can

make in protecting your company is to consider hiring a B2B CFO®. We can help you quickly

build a more fraud-proof organization, and provide the oversight that can help prevent and

detect fraudulent activity. Many embezzlement schemes run for years and extort $10s and

even $100s of thousands from a company.

I am being audited, now what?

Your bank has requested audited financials, or you are seeking Venture Capital and the VC

wants to see audited statements. You have found a buyer for your company – or you are

starting to think about an Exit Plan – and need audited statements. So you are being audited

and need to know what to do next…

The purpose of an audit is to assess an organizations’ accounting practices, procedures, and

reporting. A strong audit record is invaluable in persuading organizations to invest funds, loan

money, and purchase companies. But audits are a disruptive process. Most smal business

accounting staffs are very limited, and now they’re asked to do more work.

Auditors will require a number of schedules to help confirm figures in the financial statements.

Preparing such schedules takes a lot of time because usual y it’s for areas you only think about

once a year, so you always have to stop and think about how you did it last year. Plus, the

burden of creating these schedules is on top of your extra workload. When audits exceed their

time budgets, tempers start to fray and it can be very stressful for employees unfamiliar with

the needs of the auditor. So how can you facilitate a smooth audit?

Preparing for an Audit

1. Preparation – preparing for the audit is a year round occupation. You can’t wait until

November to begin gathering all the information you’ll need for a year-end audit.

Developing reconciliation schedules for each major accounting balance will ensure you can

justify them at year end.

Copyright © 2012 B2B CFO® 28

The Ultimate Small Business Playbook

2. Documentation – keeping reconciliation schedules, meticulous documentation of journal

entries, efficient record-keeping will all help speed the process. Making notes on key

decisions regarding financial issues is also helpful.

3. Fixed Asset Register – many small companies fail to keep a Fixed Asset register which may

involve painful sorting through records to put together a list of company assets and

determine correct depreciation schedules. Either make sure your CPA is keeping a record

and can give you up to date reports, or start to keep a register using a spreadsheet or

software. You wil need to identify each asset and the depreciation associated with it.

4. Having a monthly closing process is very helpful. Identify accounts that need to be

reconciled each month. For instance, your bank account needs to be reconciled every

month. You should be reconciling your salary expense with your payroll report, reconciling

your credit card statements to your general ledger account. These are examples of

reconciliation that, if done on a monthly basis, make your end-of-year so much easier.

5. First time audits can be especially time consuming. All opening balances will need to be

confirmed. Documentation – that may be quite old – wil need to be found and

researched. Do you have the closing documents for the owned real estate? What about

the 401K plan confirming documents? Are your credit rules documented? Do you have

evidence that Vendor A agreed to 65 day terms? What are those fixed assets on the

schedule called “No name”?

6. Have a planning meeting with your auditor at least six weeks out. Identify any problem

areas such as missing documentation, or hard to produce analysis and see if there are

alternatives. Review the engagement letter and understand timing and fees – and your

responsibilities. Review the client prep list to ensure you can produce the required

information. Discuss any changes that might impact the audit – new products, facilities,

major customers etc.

7. Immediately after closing the books, produce a comparative trial balance showing this year

vs. prior year. Identify variances over 5% and start documenting explanations. This will

help you anticipate those areas requiring more work.

8. Internal Controls – You will need to complete a series of checklists that document your

internal controls. Ideal y work on these a few months out, so that you can identify problem

areas. Make sure you have a Financial procedures manual, or bring your existing one up to

date.

Benefits of an Audit

Auditors spel out their findings in a report after the on-site audit has been completed. A ful

audit report contains three main components. It wil include an auditor’s opinion, then the

Copyright © 2012 B2B CFO® 29

The Ultimate Small Business Playbook

financial statements, and final y the footnotes – basic information about the company, the

accounting principles used, and information a reader of the report wil need to understand the

financial statements.

The auditor’s opinion wil state that the financial statements the company is releasing have

been reviewed by a CPA and are deemed trustworthy. Along with the auditor’s opinion, the

auditors will also issue a management comment letter. This is the auditor’s recommendation to

management of areas of concern and things that could be done better, or which are out of

compliance, so they can avoid penalties or assessments. The company should set up a

procedure to address those comments or to understand the risk vs. costs of adopting them.

The costs of an audit – both CPA bills and internal time – are considerable. But the benefits of

an audit are numerous. Audits can improve a company’s efficiency and profitability by helping

the management better understand their own working and financial systems. The company’s

management, as well as shareholders, suppliers and financers, is also assured that the risks in

their organization are wel understood, and that effective systems are in place to handle them.

Audits can also identify areas in an organization’s financial structure that need improvement,

and how to implement the proper changes and adjustments. Having an audit also lessens

corporate risk and therefore can reduce the cost of capital and funding. An audit can uncover

inaccuracies and discrepancies within an organization’s records, which may be indications of

weak financial organization or even internal fraud, although fraud detection is not the main

purpose of an audit.

Bottom Line: as your company grows and becomes more complex, an audit may be required by

stakeholders, or may make solid business sense for value creation. Either way, it will involve a

lot of planning and cal upon skil s that may not exist in your company. Fortunately, a B2B CFO

has many years’ experience in this area and can help your company achieve a clean audit.

My top 5 predictions for business in 2011

It’s prediction time again and I am jumping into the crystal ball to see what the year will bring. I

have surveyed the web and the predictions of BIG thinkers so you don’t have to.

1. Social media will keep growing, following the same path that e-commerce and corporate web

sites did. You will no longer be able to say “What’s LinkedIn?” without shocking your younger

business col eagues.

Copyright © 2012 B2B CFO® 30

The Ultimate Small Business Playbook

2. Cloud applications will move to the mainstream as better, more robust applications and

widespread web access converge. Small business will see new ERP applications delivered from

the cloud.

3. Mobile applications will grow rapidly as enterprises leverage these devices to power the

workforce, speed decision making and grow their revenue. More than 49% of small business

owners use smartphones, racing ahead of America in smartphone adoption, according to a

recent Forrester study. Business owners are tweeting, using GPS services and investing in

mobile advertising and texting. This year the wider availability of the iPhone on Verizon will continue to push the move.

4. Real-time business analytics will define and drive the real-time organization. As business

intelligence is layered onto the trends of cloud, mobile and social media, it will birth true real-

time businesses. Business Intel igence applications – formerly reserved for Fortune 500s – will

be available for Intuit Solution’s QuickBooks users, helping business owners to manage multiple

enterprises from anywhere.

5. Small businesses will increase online marketing spending, with websites taking the front seat,

according to a recent survey. Although nearly 60% of businesses have web sites, most are online brochures. Smart business owners recognize the need to be found on the web and SEO

spending will soar. Upgrades to online presence will increase capabilities for e-commerce,

reservation systems, corporate blogs and social media integration.

6. The Economy will not revert to the mid-2000s. Now is the new normal. Many companies will

continue to struggle as they try to identify and supply demand for products, Successful

companies will focus on cost management, niche markets, social media, government contracts,

alternative energy and outsourcing key positions such as part-time CFOs and whole functions such as inventory management.

7. Business Funding wil continue to be a struggle as banks recapitalize and focus on strong

balance sheet companies. Managing the working capital cycle will be as important as ever, with

savvy companies using trend analysis and dashboards to gain incremental improvements in

internal funding.

8. Venture Capital firms wil be hungry to invest in green business. This trend has the potential

to mirror the late 90s when anything “web”, no matter how silly, was ripe for investment.

So going green has one more benefit.

Copyright © 2012 B2B CFO® 31

index-32_1.jpg

The Ultimate Small Business Playbook

Time for Change – Business Practices that no longer work

The US Army, in a series of measures aimed at improving troop fitness, has announced that

traditional Bayonet Practice will be dropped, to provide time for more modern exercise and

fitness regimes. According to Wikipedia, the advent of modern warfare in the 20th century

decreased the bayonet’s usefulness, and as early as the American Civil War in 1861 the bayonet

was ultimately responsible for less than one percent of battlefield casualties. So…it’s probably

about time for the US Army to modify its training process.

In business, it is easy to see the same sclerotic approach to time-tested procedures that may no

longer have a place in the modern world. It is sometimes easier to carry on doing things, even

when more modern, more efficient or cheaper ways of doing things have evolved. My favorite

list of activities that are, at least worth a review are:

Payrol – QuickBooks may “make it easy” but it’s generally a waste of clerical effort to do it in-house. Payroll is complex and often confusing, carries high risks if nor done correctly, is usually

delegated to a low level accounting employee, but it can be outsourced at minimal cost to a

range of companies competing for your business.

In House HR – There are various HR options available from PEOs, ASOs and other outsourcing

organizations. Sometimes they can save significantly on insurance costs through their bulk

purchasing power, but they may also be very useful to mitigate labor risks.

Technology Management – many companies delegate IT management to “Billy Bob” because

he is good with autos and really great with video games. Today’s complex and ever changing IT

environment requires a combination of skills that are not generally found in your average $20

an hour employee – or for that matter your $250 an hour executive who really should be

focused on billable work. Server management, firewalls, email directories, software updates

and licenses, data backups, web stores etc. are simply too important not to treat as mission

critical. The costs of down-time, lost data or security breaches are incalculable. Managed IT is

Copyright © 2012 B2B CFO® 32

The Ultimate Small Business Playbook

a very competitive business, and such service companies can employ diverse staff with complex

skil sets to manage your IT needs. It’s worth getting a few quotes and seriously reviewing the

cost / benefits of outsourcing.

Accounting Software – Many companies start off with QuickBooks and get very comfortable

with its capabilities. Unfortunately, this can lead to inertia and failure to plan for growth. New

cloud based and easy set up ERP systems are starting to offer a safe, cost-effective path to next

generation accounting systems, and are worth exploring.

Exit Strategy – It’s a rare entrepreneur who has given much thought to an Exit Strategy. A

simple business sale may be costly, may fail and may damage business prospects if it goes

wrong. Exit Planning includes thinking about other options for Exit such as management

buyouts, employee shares, private equity purchases and taking the steps now to position the

company as an attractive investment.

Receivables Management – I am constantly seeing innovative ideas in this area. Col ections

automation can include various payment mechanisms, automated collections notices,

outsourced receivables management. Funding has gone beyond traditional factoring with a

number of new entities such as The Receivables Exchange, FTRANS etc. that combine funding

flexibility with management options.

Financial Management – Going beyond QuickBooks and a book-keeper, best of breed

companies are exploring new options – such as part-time CFOs to introduce better financial management, being more pro-active about working capital, profitability, planning and cash

management.

Space – Office space has never been more affordable, unless you are locked into a pre-

recession lease. At the same time the need for space has diminished significantly as options for

employees to work out of the office have mushroomed. I see many clients with huge offices,

while most of their staff is on the road. Its worth considering a permanent downsize in space

needs.

Leading edge business owners are constantly eliminating distractions and gearing up to deal

with the chal enges of faster change, global markets and fierce competition. Maybe it’s time to

review those business practices that are holding you back.

Copyright © 2012 B2B CFO® 33

The Ultimate Small Business Playbook

Tips for Profit Growth

Many established firms are still struggling with the economy and are not sure if they are

winning. Sales might be recovering, but profitability is still down, and cash flow has barely

broken even over the last 12 months. They have cut back costs as far as possible, reducing

staff, overhead, purchases and even marketing costs, but what comes next. Unless new sales

can be more profitable the outlook is bleak. Here are some steps you should be taking now to

boost your Sales and Profitability:

1. Number one; understand your real profitability drivers. Do you real y understand why you

made or lost money last month? It is a complex combination of your revenue levels, your

fixed and variable expenses, and your product mix of low and high margin customers, jobs

or products. If all you have to explain your profitability is a typically inadequate

QuickBooks-type P&L listing of revenue and expense items, then you probably don’t have a

good understanding of your profitability and simply cannot begin to take corrective actions

and drive improvement. You MUST know your margins by individual product (or service),

by product line and by customer, and understand your other profit drivers.

2. Re-calculate all of your overhead rates. In the past year, you have probably trimmed many

costs and your materials and services costs have probably changed. In addition, your

overhead base (number of machine hours, consulting hours, or service hours, etc.) has also

probably dropped. Lower costs mean lower overhead rates. Lower base hours mean

higher overhead rates – since you’re spreading costs over less “billable time”. If you

haven’t developed overhead rates to real y understand the true cost of individual products

or services, now is the time. You might be find that you can actually sell at lower prices

now and pick up sales volume. Or, you could find that you are losing money with each sale

because your costs have not come down in proportion to your “production hours”. Note

that this analysis applies to service firms as well as manufacturers. Service firms: do you

know your hourly cost rates for direct, administrative, and overhead costs?

3. Negotiate hard with vendors and show them how it can actual y be good for them. If you

can lower your costs and drive more sales, both you and your vendors wil benefit. If your

vendor won’t play bal , then it’s time to talk with more new vendors. Check the increases

from your vendors against industry price indexes. We found one founder had pushed

through three price increases totaling 16%, but the industry index was only up 6%.

4. Review your quoting model. Does it include your new, lower overhead rates and purchase

costs? Does it show you your true cost of delivering your product or service? Does it show

you the true effect on your company of winning the business? Your quoting model should

break out incremental costs and show you what the effect on cash, overheads and profit

Copyright © 2012 B2B CFO® 34

The Ultimate Small Business Playbook

from producing or servicing the quoted business. You can’t make it up on the volume, but

you can dig a deeper hole!

5. Use your new lower cost structure and quoting model to develop pricing strategies to drive

new sales, and to evaluate your current business.

6. Analyze and rank your customers using the above tools and an 80/20 analysis. You may find

you can reduce more costs by ridding customers that use many resources but don’t

contribute much.

7. Develop detailed action plans to improve each of your main profitability drivers. Assign an

action oriented leader to head a team to analyze and improve each profitability driver and

write down the specific goals, tasks, due dates and follow-up dates required to ensure each

profitability driver is improved. Set up a KPI (Key Performance Indicator) for each of your

profitability drivers and chart its historical values vs. its new target values.

Exit Plan – 9 Ways to Build Value

Exit Planning is something I recommend to all company owners. There are nearly 20 million

companies in the US with sales less than $100 million. Over 70% of these are likely to be ready

for an ownership transition over the next 10 to 15 years – as the Boomer generation retires.

But only 20% of listed businesses actually sell. An Exit Plan can help in several areas: it not only

helps an owner decide when and how they will make an exit, it also helps them start to build

the value of their business over a set time period. Since all business valuation techniques

ultimately center around a multiple of profitability, focus on revenue, profits and cash flow will

all help increase business value.

An BNET article by John Warrilow suggests 9 Ways to Make your Business more valuable in 2011. In particular, I like:

1. Predictable and Increasing Profits: Increase both profits and the multiple at which your value is created by developing steadily increasing profit margins. This demonstrates to potential

acquirors that your business is growth oriented and well managed. Focus on planning, cost

control and process improvements will all help to develop continual improvements in

profitability. Evaluate vendors and purchasing strategies continual y to find extra savings.

2. Diversify your customers: A business that relies on a larger number of customers is

considerably more valuable than one that is hostage to one or two large customers. While

having Wal-Mart as a customer might seem like a winner, it could spell disaster if that is your

only customer.

Copyright © 2012 B2B CFO® 35

The Ultimate Small Business Playbook

3. Upgrade and update your website: Marketing collateral and web presence can age rapidly.

Your web presence is not only a customer guide, it’s also a way potential investors can find

you and make evaluations. They wil Google you and you should already know what they wil

find.

4. Develop a predictable, recurring revenue stream: Annuity income, such as subscription or

long-term contracts, is viewed more favorably than large one-off contracts. The potential buyer

will feel more comfortable with a business that will continue to book revenue, rather than one

that may have a few key contracts – maybe even tied to the owner’s personal contacts.

Exit Planning should be a continuous process and there are numerous ways you can improve

the valuation of your company. A good financial review is a first step to understanding where

you should focus.

What can a CFO do for you?

How to create a financial management system

It may not be clear what a CFO does and how they can help companies improve cash, profits

and long term business value. The fol owing ten objectives show what a B2B CFO can

accomplish in a short time period...

1. Cash Flow Forecast – A weekly forecast of cash – out 6 weeks – will create a strong control

discipline and enable you to look forward at least a month.

2. Key Metrics – What are your 5 key performance indicators? How do you review them and

maintain focus each week or month.

3. Timely Financial Statements – Accurate and timely financial statements are essential for

managing results, and maintaining investor/ bank confidence.

4. Financial Analysis – a monthly comparative review of financial and other indicators

5. Commentary – a monthly operations overview with suggestion for improvement and

strategic development

6. Monthly Meeting – Chair a monthly meeting on the financial performance, impact on

strategy and implications for change

7. Financial Planning – Develop budgets, plans and rolling forecast to manage desired activities

Copyright © 2012 B2B CFO® 36

The Ultimate Small Business Playbook

8. Cash Management – Build relationships with banks and investors to ensure company cash

flow plan is accomplished.

9. Financial Control – Implement internal process and procedures to deter fraud, improve

efficiency and maintain confidence in results

Articles By Wendy Nelson

5 Tips to Improve Profitability

As you build your business, keep a close eye on profit growth. It’s easy to get caught up in the

wrong metrics and miss important nuances that could eventually become your downfall. In

other words, don’t let gross revenue be the only financial metric you focus on.

1. Determine the Gross Margin you need to cover your overhead and establish pricing

accordingly. In the beginning, it’s tempting to offer discounts to get the business off the

ground – revenue at a low margin is better than no revenue at all, right? In reality, If you

need 35% for the sale to makes sense, selling your product at 25% will only accelerate cash

flow problems

2. Keep a close eye on variable costs. If you establish your pricing in order to achieve a certain

margin, and your variable costs increase per item, it won’t take long before you no longer

earn the margin you need to. Manage variable expenses as a whole and as a % of revenue

to ensure your margin stays within an acceptable range.

3. Collect accounts receivable. It doesn’t take long for receivables to start aging and they older

they get, the harder it will be to collect. In addition, if you have a regular customer who falls

behind on payments, the problem could become a whole lot larger than the past due

portion of your receivable from them.

4. Manage discretionary spending closely. It can be easier than you would think to escalate

into a spending spree. Take a moment to consider the cost/benefit of last minute travel,

new (fun) technology, marketing campaigns, etc. before handing over your credit card.

5. Treat your employees like the assets they are. Invest in your team in small ways if cash is

tight (see my last post about providing good coffee to your employees).

Copyright © 2012 B2B CFO® 37

The Ultimate Small Business Playbook

Articles By Michael Campian

The Services of a Part time CFO in Lake Orion

How can a Part time CFO help you and your business, let me count the ways….

Services related to Key Decision Making

1. In-house preparation of accurate and timely monthly financial statements

2. In-house preparation of monthly budget-to-actual reports

3. Forecasts of income and expenses

4. In-house management report preparation

5. Recommendations on areas for improvement or future growth

Services related to Cash Improvement

6. Forecasts of sources and uses of cash

7. Improve collections of accounts receivable

8. Inventory control and management

9. Recommendations on how to reduce overhead

Services related to Creditors and Lenders

10. Prepare loan packages

11. Prepare business plans

12. Meetings with lenders with or for the owner

13. Assist with workout solutions with creditors

Other services that can be provided

14. Internal control improvement and implementation

15. Advice on computer hardware and software upgrades

Copyright © 2012 B2B CFO® 38

The Ultimate Small Business Playbook

16. Supervision and mentoring of the accounting staff

17. Assist in preparing yearly audit workpapers

18. Coordination of tax return preparation with the tax CPA

Articles By Alan Lefkowitz

How Do You Differentiate Yourself From The Competition? It’s All About

Customer Service

I fil ed up my car with gas the other day, paying almost $4 dollars a gallon and then paying the

attendant who didn’t speak English, and who appeared to be doing me a favor by taking my

money. I remembered a time when the gas companies promised that if the attendant didn’t

get to your car in under ten seconds, you’d get a free drinking glass, or if they didn’t offer to

check your oil, you’d get a free fill-up. My mind drifted further to a time when I could phone a

company and a person actually answered the phone, asking something crazy like, “Can I help

you?” You didn’t have to press a series of buttons, getting automated questions that you

weren’t paying attention to, and then forgetting what numbers to press. And there it was, the

subject of my next article (or is that, my next rant?). What happened to customer service?

As the recession continues (yeah, it’s not over yet!), we continue to hear about cost cutting.

Every company has to cut costs to survive – that’s the mantra. A day doesn’t go by where we

don’t hear about cost cutting. Yet, the companies I am referring to above seem to have

forgotten that they are leaving strong impressions on their customers, and not necessarily in a

positive way.

We now live in a world where there is an abundance of similar products. New products hit the

market and with lightning speed, similar products are on the shelves. A good case in point is

the iPad. Within months of being introduced to the market, the iPad has seen competition

from Blackberry, Kindle and others. It’s often difficult to differentiate one product from

another. Companies are faced with a similar dilemma when hiring candidates for jobs. There

was a time where a college degree from a reputable university gave the recruit an advantage in

the hiring process – not any more. Now, it seems that most candidates have the university

degree, not to mention similar resumes, and companies are challenged to find the right

candidate. And, candidates are challenged to demonstrate to a potential employer that they

are the best candidates for the job.

Copyright © 2012 B2B CFO® 39

The Ultimate Small Business Playbook

So, how do you navigate through the abundance of common products or services being

offered? Whether you are a buyer or sel er of those products or services, you have to

differentiate yourself from the competition. And how do you do that? Here are some ways you

can differentiate your company or yourself from the competition.

Give Exceptional Customer Service

Customer service is lacking in so many businesses. How many times have you heard someone

say something like, “this business would be great if weren’t for the damn customers?”

Remember that you have no business without your customers and your best business is with

your existing customers. You need repeat business and referrals. The only way to keep them

and get new customers is exceptional customer service. Meeting customer expectations is not

good enough; you have to exceed expectations…every time!

Listen to Your Customers

Really listen to your customers to find out exactly what they want or need. Are you sure your

customer feels that your product or service fills their needs? Or do you fol ow the attitude that

says, “if we build it they will come?” That approach generally doesn’t work. People are much

more selective about how they spend their money. You will differentiate yourself when your

customers feel that your product or service meets their needs and they believe that you hear

and respond to them.

Add More Value to Your Product or Service

The actual or perceived value of your product or service must be greater than the cost. The

corollary to that for a service business is that the customer should feel that you left the place

better than you found it. You must find a way to provide the extra benefit, feature or service

that excites your customer. If you are a recruit, you must demonstrate how the company will

be in a better state (more income, less cost, better decision-making capability, etc.) than it was

before you were hired.

Sell Feelings, Not Products

The car companies have understood this for years. They are not tel ing you about the engine or

how the fuel injection system works. They aren’t tel ing you about how the coefficient of drag

gives you better gas mileage. They use whatever images they have to use to create the exciting

feelings you wil feel when get behind the wheel and drive that car. You need to understand

that you also are selling feelings. If the customer feels good about your product or the benefits

they will get from your product or service, they will not only buy from you, they will buy again

and again, and they will tell everyone.

Highlight Benefits versus Features

Copyright © 2012 B2B CFO® 40

The Ultimate Small Business Playbook

When the door-to-door vacuum cleaner salesman comes to your house and drops dirt on your

carpet, you do not care about the wind tunnel technology that makes that vacuum do its job.

All you care about is that the vacuum cleaner picks up all the dirt and leaves your carpet

spotless. The point is, you must demonstrate to your customers the benefits they will receive

from your product, service or relationship. The buyer will buy from you when he perceives the

benefits you provide and feels great about it.

Become a Specialist

Did you ever notice that everyone in a bank has a title? It seems like everyone is a vice

president – first vice president, second vice president, assistant vice president, vice president,

senior vice president, and so on. Why is that? Everyone wants to believe that they have the

most qualified person and people want to feel that they are working with the best – an expert

in their field. But, it takes more than a title. Today, you have to become a specialist. You have

to become the “go to” person or company in your field. Obtaining specialized training and

certifications helps. Becoming a specialist drives business your way, especially repeat business.

Reduce Risk

People want to know that you stand behind your product or service. If you believe in what you

are sel ing and it provides the value and benefits you are offering, you should be able to stand

behind your product. Discounts for fast payments are common and buyers like that, but how

about giving a money-back guarantee? A money-back guarantee not only says a lot about your

belief in your product or service, but also helps take the risk out of the transaction for the buyer

and give them peace of mind. Use customer surveys and then contact your customers in

response to their feedback. Contacting your customers and demonstrating that you are

making changes to meet their needs is where you differentiate yourself from the competition.

Many companies use surveys and then attempt to explain away why the survey response is not

valid. They are also differentiating themselves, but not in a good way.

Build a Relationship

In addition to everything mentioned above, investing in your customers or potential customers

by building relationships goes a long way toward differentiating your company and yourself.

People want to do business with people they like and trust. So, work hard to build

relationships. This takes some time and some money but it goes a long way toward building

sales, repeat business, and referrals.

Copyright © 2012 B2B CFO® 41

The Ultimate Small Business Playbook

Articles By Bill Moore

Small Biz Blogging Mental Roadblocks

I want to kick myself now. It took me 9 months to start blogging. I registered/bought

BostonCFO.net in June 2009. I subscribed to and sometimes read other blogs about business,

wine, blogging, dad stuff, social media, etc. I got two clients blogging, (one is now a HubSpot

customer). So, why did this take me so long? (Maybe, as a father of 6, my best work needs 9

months to develop?) Was I afraid of website technology? Was I afraid of not having much to

say? Was I a perfectionist? Let me use this post to “think out loud” about my launching

experience as a small business owner blogger and see if it can help another small business

owner that may be stuck.

Website Technology: BlogSpot and WordPress have very basic starter blogs where you can

start blogging in a couple of minutes, but I wanted mine to look right. Granted I had to register

the domain, arrange for a host, figure out how to get the site setup, but there was always help

anytime I asked. I decided to use Thesis because of the recommendations for ease of use for

SEO and a variety of other reasons that escape me now. So, technology wasn’t the problem.