If you’re waiting for better economic times in order to expand your business, stop now, says profit-management expert Patricia Sigmon, funder of LPS consulting Co. in New Jersey and author of Six Steps to Creating Profit. “It’s time to accept that operating lean and mean will be necessary for the foreseeable future,” she says. “Success today is about major regrouping, major renovation, and creating a brighter, less stressful, more optimistic view.” Sigmon suggests six strategies to get started.
1. Fire your worst customers. Often, the highest-maintenance, most time-consuming customers are the same ones who pay you the least. Analyze the profit margin that each customer produces and fire those who don’t provide profit. “The easiest way to do it is to raise their rates,” Sigmon says.
2. Reward your best customers. Work hard at keeping those customers who do boost your bottom line. Offer them frequent buyer rewards, send them a small gift at their one-year anniversary, and give them a call every few months to “check in,” thank them for their business, and ask what else they might need. “Treat them like gold,” Sigmon says.
3. Start relationships. Turn one-time sales into relationships. Start monthly maintenance plans, suggest auxiliary services, sell complementary products, or offer retainer plans covering 50 to 100 labor hours.
4. Erase expenses. If that means selling your car or closing the office, do it. You can’t build a new profit base when you are still using yesterday’s expense model. Go through your expenses, line by line, and get rid of everything you can live without this next year. Also look carefully at each department and each employee. Can you eliminate positions, combine jobs, delete processes, and outsource tasks? Outsource as much as possible (without hurting quality) to cut employment costs.
5. Update your online network. Businesses that don’t leverage social networking get left behind, Sigmon warns. “Jump-start new relationships with forum building on social network sites by creating a blog on your website, adding a keyword-rich article or two every week, then trigger it to post to your Facebook and Twitter pages,” she advises.
6. Take your office with you. Use interactive cloud-based systems to conduct business anywhere. Untethering from a physical location can make you more productive.
Sigmon says that business owners who adjust to the new normal get to experience a wonderful feeling: relief. She adds that owners also should strive for at least a minimum base in the budget to pay themselves, too. “Stop pretending that you don’t need to be paid,” she says. “You do.”
Another strategy is to learn how to avoid check fraud and how to detect a bad check. According to American Banker magazine, “It is estimated that retailers throughout the nation lose $12-$15 billion each year due to the acceptance of bad checks.”
You should examine all checks presented for payment to make sure they’re legitimate. Although any one of these signs does not necessarily indicate that the check is bad, any combination of them should signal a warning.
• Lack of perforation: Most checks are connected in a book and are removed at perforations. Lack of perforation may indicate a counterfeited check.
• Check number is low or missing: According to the Los Angeles County District Attorney’s Office, “About 90% of bad checks are drawn on new accounts.” It stands to reason that caution should be exercised when accepting checks with low numbers (up to 400 on personal or up to 1500 on business accounts).
• Changes in font: If the font is uneven, appears in varying styles or sizes, the check may have been altered.
• Missing information: If the payee’s name, address or phone number or the bank’s name or address is missing, the check may have been counterfeited or altered.
• Stains or discolorations: Checks altered chemically, or through the use of something as simple as an eraser, can leave changes in the color or tone of the check stock. What looks like a coffee spill may really be a sign of fraud.
• MICR encoding: Magnetic Ink Character Recognition (MICR) coding are the numbers printed along the bottom of checks. The special magnetic ink with which the numbers are printed is not glossy, so if they do appear glossy, they may be forged. If the check does not have MICR numbers printed on it, or if they do not include the check number, the check may be fraudulent.
• Signature: If the check is not properly endorsed, this may be a simple error or it may be an attempt at fraud.
Putting security measures in place, knowing the signs of check fraud and responding to suspicions in a timely manner can help your business reduce the risk of being a victim of check fraud and help your bottom line.
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