Getting Paid in Tough Times as an Owner

The business has been struggling. And consequently, so has my family. Things got really bad at home when I had to suspend my salary and didn’t take any distributions. We’re working hard to get things to turn back up, but I’m still not comfortable. I expect that as sales turn back up, things should get easier. We can hold off on paying down the credit line for a while, which means I’ll be able to take salary again. Am I missing anything?

Thoughts of the Day: As an owner you have to think about who comes first – you, or the company that feeds you. Making decisions based on the Income Statement and ignoring the Balance Sheet can be very dangerous. When things get tight financially it’s important to figure out how long it will take to turn things around.

Ownership of a business is both a privilege and a responsibility. Nurturing the business, insuring it grows, thrives and stays healthy is not only good for business, it’s also good for the owner’s pocketbook.

In times of stress, it can be hard to be objective about personal needs versus business needs. Family is important, so is the business, but which comes first?

For most business owners, their company is their primary source of income. Household expenses may seem urgent. But taking money out for household spending and leaving the company under-funded can be deadly for both home and business. Making sure the company is healthy means your family will be able to prosper as well.

One way that business owners get into trouble is looking at the net income left over on the Profit and Loss Statement and ignoring the Balance Sheet. Thinking that you can go back to taking money out as soon as sales improve overlooks the need to deal with diminished resources. That story is told on the Balance Sheet, which shows the fiscal health of the business.

Not sure how to read the company’s balance sheet? Get someone to explain it to you. Do you have enough cash on hand to weather 6 months of problems? Are current assets twice what current liabilities are? Are debts below 2.5 x equity? Has debt been dropping? Have you successfully invested over the years in the company’s future? Is equity rising?

Take a hard look at how the business got to this difficult spot. Lack of success stems from years of missteps. When things go upside down in the business, and there’s no more money to pay out, it’s time for drastic re-evaluation.

Get perspective, from outsiders who you respect, ask for their opinions. Listen, even if you don’t like what you hear. Use their advice to refocus by figuring out what gets you to the end goal, rather than what gets you through tomorrow.

Deal with hard choices. Stop spending on things that drain cash and don’t contribute to profitable growth. Explain to family members that cuts have to be made. If you lost your job – or lost the company – you’d be making cuts. Do so before it comes to that.

Be realistic, how long will it take to get from where you are today to where you want to be? Prioritize rebuilding the company over personal comfort. Give your company time to heal permanently.

Most research on happiness says that the more things people acquire the less happy they become. Brainstorm other ways to have positive experiences that bring you joy. Go for a walk. Have a picnic in the park. Drive to the beach for some sun and fresh air. Spend time helping a friend. Read a book. Listen to music. Low cost / no cost solutions for the mind and soul can help improve your outlook as you re-focus on rebuilding the business that has provided you with so much.

As an owner, getting paid by the company is a privilege, not an entitlement. First you have to pay to operate the business – payroll, equipment, materials. Make enough profit to pay taxes, invest in constant refreshment of the company, build up reserves and pay off debts according to plan. Then, and only then, can you, as owner, afford to take money out of the company for personal needs.

Looking for a good book? Happy at Last, The Thinking Person’s Guide to Finding Joy, by Richard O’Connor.

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What to Do When the Customer Smells Blood

In customer service, when there’s a problem and someone panics and throws a call to us as managers / owners, we’re at a disadvantage. Means we’re already set up to lose – the customer can smell blood.

Thoughts of the Day: What’s the process for handling a customer problem? Train to improve ability to handle issues. Treat problems as opportunities. Learn from experience.

Give employees a greater sense of confidence that they can handle the situation by setting up a process for them to follow. Knowing what to expect can make it much easier for employees to stick with an unpleasant call.Add these steps to your customer service process, if you’re not already doing them.

  1. Answer the phone with a smile and believe that most customers can be helped; goal is to send customers away believing they got a fair deal.
  2. Understand that customer calls are indications they hope the situation can be fixed.
  3. Share contact information, in case the call gets cut off. Log date, time, who called, contact info, who handled the call, nature of the problem. Leave a place to fill in resolution.
  4. Reassure callers that you expect to resolve the situation and have authority to do so in most cases.
  5. Deal right away with customer preference for a manager by stating: “Before I continue let me ask you: would you prefer to work with me or would you rather be referred immediately to a manager? I can probably help you now, or at least get the process started; you may have to wait for a manager to get on the line, who is going to ask you the same questions I’m about to ask.”
  6. Assuming the customer agrees to stick with you, ask for a brief statement of the problem. Get clarification if necessary. Take good notes.
  7. Contain the customer’s negative reaction by listening carefully, restating, and asking questions. Don’t debate. Don’t disagree. Just listen.
  8. Restate the problem: “If I understand you correctly . . .”. End with, “Did I get that right?”
  9. Assess the failure to meet customer needs, as well as how that breakdown impacted the customer. Factor impact into your decision on how far to go to rectify the situation.
  10. Ask the customer how they’d like the situation resolved. This could be challenging: the customer may over reach. It’s generally better to know what the customer has in mind. If the customer is overreaching, say, “That may be more than I can do, but I will do my best to make this right.”
  11. Make an offer. Ask the customer if this would satisfactorily resolve the problem.
  12. If unsatisfied, assess if this customer is likely to become satisfied with any additional offer. Figure out what it will take to get over the hump.
  13. Make a second offer or suggest referring the call to a manager by saying, “I think it’s time to get my manager on the phone. Can you please hold on while I refer my notes to him/her?”

Sometimes you get to offense by starting with defense. Train everyone in customer service. Practice with each other. Learn how to mirror and match, how to clarify, how to sooth ruffled feathers.

Know that giving customers what they want, and then some, can turn them into raving fans. Recovering from bad situations builds relationships. Assess how many more purchases this customer, and all of their friends, can make.

Use the complaint call log to spot trends and opportunities. Similar unmet needs keep coming up? Solve the need and create more sales. Problem with how to properly use the product or service? Create an instruction manual for new customers. Repeat breakdowns? Change the way you manufacture and deliver.

Looking for a good book? Managing Knock Your Socks Off Service, by Chip Bell and Ron Zemke.

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Address Online Customer Reviews Sincerely

We don’t have a good online rating on customer service. What should we do?

Thoughts of the Day: Excellent customer service has real value. Put someone who knows what they’re doing in charge, and then make sure they do their homework. Keep your eye on competitors and treat the good ones as coopetitors. If you messed up be genuine and solve it, but also know when to quit trying to please.

Ours is a service economy, and buyers don’t have to work hard to find alternatives. Customers use customer service reviews as a deciding factor when looking to make a purchase. Make every customer feel special – pre-sale, at time of sale and post-sale.

Make the buying experience as easy as possible, frustrated buyers will leave before completing their purchases. That’s lost opportunity, and lost trust. Those who have something to complain about, most often won’t – leaving your company in the dark, unaware there’s a problem.

Convert every complaint into an opportunity to connect. People do business with people they trust. It’s the little things that count like asking how a customer would like to be addressed. Have reps give out their names and contact info before being asked.

Keep a log of complaints and resolutions, use that to train new employees. Teach them to keep their cool when under attack. Escalation and anger won’t solve problems, patience, understanding and a cool head needs to prevail.

Sending a customer away with incomplete information leaves your company vulnerable. People turn to the internet for information, which makes it easy to look at other options. Ask a simple question on every interaction: Did that answer meet your needs, or do you need something more?

Be aware that even the most loyal of customers can leave. The effort to acquire new customers is estimated at 10 – 20 times that needed to maintain existing ones. Reduce the opportunity for loss.

One way to get customers to rave about your company is to look at services that customers complain about, and do an honest assessment. If a competitor can do it better, maybe it’s a good opportunity to refer a customer to them. But make sure to look for competitors who will return the favor.

Not all customers are equal. Some like to complain – a lot, be alter to that, and monitor it. Steer clear of customers who’ve already dissed your best competitors. Complaints are inevitable, but how you deal with them is what really matters. Put someone experienced in charge of finding out what really happened, and offer solutions. Show you’re doing everything possible to make things right. The customer is always right, or needs to feel like they are. No one ever wins by having a public fight with a customer.

Do research your research, Google your company. Don’t get defensive. Grow from each experience. If your company was wrong, go above and beyond. If customers are talking to you, they’re indicating willingness to continue doing business. Win them back by being generous. Once things are fixed, encourage customer engagement about their experience on social media. Signal to the marketplace that your company stands behind what it sells.

Use feedback from customers to help design better products or services. What did the customer really want? Get information to your product or service design team. Review it regularly for ideas on products or services to keep, modify and dump.

Do more than manage complaints. As a small business, customer service is one way you can stand out. In-depth knowledge of the company, its products and services, and even the personnel assigned to each customer, will make your company seem more personal and relatable.

Set realistic expectations with customers in order to build trust. If you don’t have an answer, tell the truth. Estimate the time needed to do research. If you still don’t have an answer within the specified time explain you’re still working on it, and offer a new timeframe. And then follow through. Make it a mission to help every customer. A bad situation handled well, results in customer satisfaction, 7/10 times will ensure future business. Make relationships count by fighting to insure every customer goes away satisfied.

Looking for a good book? Sticks and Stones: How Digital Business Reputations Are Created Over Time and Lost in a Click, by Larry Weber.

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If Employees Aren’t Listening, Reflect on Leadership

Worried that people who should be listening to me, aren’t listening to me. Think about my employees, and ask myself, “If they’re not going to listen to their boss, who are they going to listen to?” How can I keep from getting pushed out of the way?

Thoughts of the Day: Take a look around you. Make time to think about what you want, and whether the habits of communicating are getting you there. Figure out how you can get better at communicating. Lower your perception of the consequences if things go wrong. Think before you speak. Plant seeds.

Is it really just you who’s being ignored, or are others having the same problem? Is it all employees, or just some? Is it the same employee over and over, or different employees at different times? Is it all the time, or just some of the time?

Figure out the conditions under which you observe that you aren’t being heard. Compare that to your observations about what others experience under similar conditions. Do a reality check on who, when, what, and how people go their own way without dialing in to you.

Then ask some questions. Are they attempting to spread their wings, trying to fly solo with new skills they’ve acquired? Are they repeating a habitual way of behaving with you – as in, they always dial you out? Or is it somewhere in between?

Now do a reality check. What happens if specific people do or don’t listen to you? Do they get better results with, or without your input? Or do they come out about the same either way? Do they get enough value from your input that they can achieve higher level outcomes? Are you making requests that make their life easier or harder? Try looking at it from the receiver’s viewpoint.

Time for a bit of self-reflection. How do you come across as a leader? Are you positively motivated, and are you positively motivating the people around you? Can you inspire confidence?

Think about this. If you’re not ready to empower yourself to achieve success, how will you impart that to others? On the other hand, if you’re leading and no one is following, why is the whole group following a different path? What is it about how you’re coming across?

Can you take as good as you dish it out? If someone isn’t listening to you, ask them why. But be prepared to hear some things that might make you uncomfortable. Listen without defense in order to learn.

What in your style of presentation is irritating people or pushing them away. It often comes down to what you say and how you say it. Is it all about getting what you want? What gets in the way of perceiving or responding to what the person across from you needs?

Negative approaches tend to generate negative responses, and vice versa for positive ones. Keep doom and gloom to a minimum – it’s neither inspiring nor motivating. Instead, search for purpose. Put people on a mission.

Give people a visual of how things might turn out. Make sure it’s one that they’d actually want to achieve. Make it something worth having, something worth reaching for, from theirs, not your, point of view. To do that, you’re actually going to have to invest some time figuring out where the other person is coming from.

Remind yourself that it takes a village to build well rounded solutions. Plant seeds. Ask for small changes. Encourage behaviors you want to see continue by saying, “thank you, I appreciate that.” Talk honestly about problems, but also build people up by showing them how changes they are making lead to a better world. Take time out to celebrate wins – more than the time spent moaning over losses – a lot more.

Looking for a good book? Start With Why: How Great Leaders Inspire Everyone to Take Action, by Simon Sinek.

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