Raymond Partners Business Growth Magazine

Business Growth Magazine

JULY 2013

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Contents.

JULY 2013

3. Why Do Clients Leave Your Business?

4. What Clients Want But Won't Tell You.

Featured

How To

5. What Should I Charge For My Product or Service?

7. Getting Payment from Debtors.

Health & Wellbeing

8. Staying Healthy at Work.

6. What is a SMSF? And What are The Benefits?

Fun Facts

9. Ever Wondered How Some of The Biggest Names in Business Came to Get Their Company Names?

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Business Growth

Have you ever stopped to think about why your customers leave your business? Well, some time ago, a comprehensive survey was undertaken and the results were clear. They are only averages but the chances are that these figures will apply to your business

Why Do Clients Leave Your Business? 1) 1% die. Alternatively businesses may close down. The most important thing to be careful about here is who you offer credit to. There are usually warning signs before a business closes down. More often , a business will get taken over so you will need to work hard to continue to do business with the new operators. 2) 3% move away. This is something that is difficult to overcome, especially if you are a local business such as a drycleaner. It is important for your local business to have the right demographics for your product. Ideally, you will be located in a growing population. This problem has forced many rural businesses to close down as city living is preferred by a larger part of the population. Other places such a coastal towns experience growing populations. 3) 5% form other relationships. Often, a relative or friend will recommend another supplier and it is difficult but not impossible to persuade these customers to stay with your business. Alternatively, business coaches or mentors or other reputable people will recommend your competitors to your customers.

4) 14% are dissatisfied with your products or services. Obviously, this reason gives you the best scope for improvement. It is comforting to know that you have the ability to control these customers that leave your business. 5) 68% of your customers will leave your business because of perceived indifference towards your business from the customer. Even if you think you do a lot for your customers, it is possible that your customers do not see it that way. How to treat your customers is never about you, it is always about how your customers feel. Many businesses are startled to discover that their customers do not think as favorably about their business as they thought they did. Times are different now and customer retention is vital to you profits and also to the growth in your business. Ian Renton Managing Director Australian Christmas Cards Author and customer relationship expert [email protected] www.austchristmascards.com.au Phone: 1800 226 202 or 02 9631 3366

Magazine

In the next issue of

“Business Growth” we will present several

ideas for you on how you can increase

your customer reten(on.

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Business Growth

What Your Customers Want, But Won’t Tell You!

Contrary to common belief, clients will not go almost anywhere to save money. If you provide excellent service your customers will be more than willing to pay for it. Below are a few things customers expect you to do, but will never ask or tell you to. Looks Matter When a customer has dealings with you and your staff, they want to interact with neat, well put together people who are pleasant to deal with, positive and above all professional. If your business doesn’t already have some type of dress code or uniform it may be time to review this. Be certain to keep the uniform or dress code in line with your type of work or culture.

Knowledgeable and Available Staff While a customer is making the buying decision, they want knowledgeable assistance, available when they want it. Clients place a very high value on precise information and want to be interacting with employees who know their product or service inside and out. When going to pitch the next big prospect rather than the standard, “Tell me about your business”, do some research first, then go in telling them what you know about their business and the types of things you believe you can provide to benefit their business. Keep Things Simple When explaining what you do, keep it simple and stick to the basics. Keep in mind the customer has hired you to take on a project or to solve a problem, and many do not want nor need to know the ins and outs. Only Wanting to Deal with a Particular Staff Member Customers know that Directors and CEOs have the power to get things done, meaning they only want to deal with those people. Above all else try to be consistent with you interactions with clients across the board. The last thing you want to do is make your clients feel as though you are passing them off.

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A Fast Finish This is where far too many businesses fall short. While clients are in the process of deciding whether or not to proceed with your service or product, they are on your time. During this process they expect constant assistance making the right decision. However, once the decision is made, watch out because now you are working on their watch. This means they want the transaction to be completed as quickly as possible. What it all boils down to is that it may be your service, not your price that dictates whether or not you secure clients long term. So strive to give people what they want, the way they want it and you are much more likely to retain them as long term, satisfied clients.

What your business needs to stand

out is be�er customer service and

sa�sfied customers.

Don’t make it the simple “please

and thank you” variety.

Aim much higher.

Strive for excellent, standout,

outrageously great service in order

to stand out from the crowd.

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Business Growth

What Should I Charge for My Product or Service?

One of the most confusing tasks a business owner will face is how to set prices for their product or service. When you first start out as a business owner one of the best places to start is to be aware of your competitors prices. This will usually give you an idea of what the industry standard is. The next thing to gauge is how much profit you are willing to sacrifice on each unit sold or on your hourly rate in order to provide consumers competitive pricing. The days where you could simply launch a business service or product, particularly online and not be up against many competitors are well and truly over. Unless your niche market is very clearly defined, chances are you are going to be up against other businesses offering similar services or products and distinction will be key to stand out from the crowd. It’s one thing to price with relation to how much you believe your time or product is worth, it’s another to implement an effective pricing strategy in line accordingly with the market and your brand.

RAYMOND PARTNERS TOP 4 PRICING TIPS:

1. Don’t set prices too low. A large

number of businesses make this mistake and their margins are effected accordingly.

2. Be flexible and willing to price each job based on individual circumstances.

3. Know your value and if entering a competitive market, find alternative areas to be competitive on other than price. i.e. Quality service, industry expertise, or building close relationships with your client base. Anything that sets you aside from the rest but doesn’t eat into your margins.

4. Always provide great customer service, it is much more cost effective to retain a satisfied customer base than to get new ones.

Magazine

To find out more about pricing strategies

within your Business please contact our office

and speak to one of our friendly accountants.

At Raymond Partners we understand how

important it is for business growth to have

“hands on” involvement, and our senior

accountants are able to meet you at your

business to review all opera(on and taxa(on

requirements.

03 5622 3587 [email protected]

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Business Growth Magazine

What is a SMSF? And what are the benefits? The main difference between Self-Managed Superannuation Funds and other funds is that the members of SMSF’s act as trustees. This allows trustees/members to control their own superannuation investments for their own retirement benefits. All SMSF’s use a trust structure, meaning there must be trustees, a trust deed and governing rules and also beneficiaries/members. Generally a SMSF is defined as a superannuation fund where there are less than five members, all of the members are trustees and no trustees receive any remuneration for their trustee services. SMSF’s can invest in a vast array of investment products, commercial and residential property, precious metals and other various assets, subject to certain restrictions. Some of the most common funds a SMSF can accept are: Superannuation guarantee contributions (employer compulsory contributions). Contributions from your employer where you have salary sacrificed, your after tax personal contributions, Government co-contributions and Transfers or roll-overs from other superannuation funds. Benefits of a SMSF Full Control You as trustee take responsibility for managing the SMSF, the investment strategy and process. This enables you to create the exact investment portfolio that meets your needs. Investment Choice SMSF’s enable you to invest in a wide range of assets including: • Managed Funds • Shares- Listed and unlisted • Shares- Australian and Overseas • Listed and unlisted property trusts • Bonds • Derivative products; warrants and options • Real Property

Taxation Benefits When you are in accumulation phase: • Gain tax benefits for certain contributions – concessional

contributions are taxed at a flat rate of 15% • Government co-contribution may apply for qualifying

contributions • Investment earnings are taxed at a maximum rate of 15% • 10% tax on capital gains realised on assets held for 12

months or more and; • Implement strategy to manage individual members’ tax

positions. When you are in pension phase (fund assets are held solely for the purpose of paying a current pension), all income earned and realised capital gains are exempt from tax within the superfund. Flexibility Running a SMSF provides you with the flexibility to actively manage your investment options, and also enables you to quickly adjust your portfolio as markets change. Other Benefits

• Lower fees- Generally lower than industry and retail funds • Pooling Resources- Ability to pool your resources with up

to four fund members • Direct Property- Investing in direct property • Life Insurance- Obtain life insurance and income protection

insurance cover through your SMSF. • Effective transfer of wealth- A SMSF is usually largest or

second largest asset after your family home. Resource- Superannuation Advisors Australia Level 1, 51 Yarra Street, Geelong VIC 3220 Please ask one of our friendly staff about SMSF ‘s

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Business Growth Magazine

Tips for Getting Payment from Debtors

1. Develop Clear Terms. Before you enter into an arrangement where you offer credit, it is imperative that your terms of payment and a contract of “Terms of engagement” for the work or service being provided is put in place. It is important to note that a contract can exist whenever your business agrees to carry out a service or supply goods for payment, regardless of whether the contract is in writing. It is absolutely vital that you discuss the terms and conditions of service and payment with your client prior to any product or service being provided. 2. Be prepared. Prior to making you next collection call, take time to anticipate common debtor excuses, and matching them with effective responses. Now, if a debtor has an excuse in an attempt to end the phone call without making a commitment to clear the debt, you can take control by responding with a well thought out response and returning to the purpose of your call- collect the debt.

Below are some examples. Debtor: The cheque is in the post Collector: Great! Can I please have the cheque number, amount and date it was mailed so I can ensure it is receipted correctly? Debtor: I don’t have the money right now. Things are tight. Collector: I understand that times are tough. Perhaps we could set you up on a payment plan, or can you at least make a part payment today? 3. Know the facts before picking up the phone. If you hear the words “I’ll have to get back to you on that”, come out of your mouth, you have given the debtor an extension without a commitment to pay. This means you will have to start from square one when you call back next. As a bare minimum, be sure to have the following information in front of you before you make the call:

• Exact amount owing. • Terms of sale/service i.e. 30 day payment terms. • Products/services the amount is relevant to. • Payment due date. • Other outstanding invoices, even those not yet past due date.

4. Learn to be flexible. Following the above mentioned tips will help improve the effectiveness of your debt collection methods; however there

is no magic solution in debt collection. Each and every debtor is different, meaning what works well with one may get you nowhere with another.

Be sure to listen very carefully to the debtor at

hand and you will soon determine the best way

to handle each situa�on.

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Staying Healthy at Work (Part 1.)

Earning a living doesn't have to cost you your health and wellbeing. There are numerous things you can be doing to ensure you remain healthy and happy at your place of work. For the majority of us the time we spend at work takes up most of our waking life.

Don’t Ignore Stress There is absolutely no denying that work can be at times stressful, but more often than not it is the way we think, rather than the situation itself that leave us feeling overwhelmed. A task or job that seems all too difficult may be more manageable if you let go of certain beliefs or notions, that you should never make mistakes, or that it is imperative for co-workers to approve of you and the way you manage your work load, all the time. Also, if you are feeling overwhelmed at work, talk to your manager/supervisor or look at the management of your work load.

The following may also help alleviate stress:

• Keep work and your personal time

separate. Try not to take work home with you.

• Get Regular exercise. • Say no to extra work if you feel as

though you are unable to manage it. • Stay connect with your loved ones,

friends and family when you're not working.

• Try to take regular breaks or intervals

away from your desk at work—no matter how busy you may or may not be.

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Business Growth

• Spend some time each day doing

things just for you. i.e. regularly partake in a hobby or activity you enjoy, or catch up with friends.

• Manage irrational or negative thoughts

to the best of your ability such as, “I have to be responsible for everything’’ write down counterproductive thought and challenge them with positive or more realistic ones.

• Research and implement stress-relief

strategies, such as relaxation.

See the next issue of “Business

Growth’’ Magazine for further

(ps on how to stay healthy in

the work Place

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Fun Facts

Magazine

Business Growth

See the next issue of

“Business Growth’’ Magazine

for more Fun Facts.

Ever wondered how some of the

biggest businesses got their company

names?

IKEA The initials of the founder Ingvar Kamprad, plus the initials of the property and village he grew up in, Elmtaryd Agunnaryd.

SHARP Named after the company's first ever product, the ever-sharp pencil.

LEGO From the Danish leg godt, which means play well.

PEPSI Named after the digestive enzyme pepsin. Stylized form of rhebok, which is an African Antelope.

REEBOK Originally part of the Echo Bay Technology Group. The URL

EBAY EchoBay.com was already taken by a mining company based out of Echo Bay, Nevada. COCA COLA Named from the Coca leaves and kola nuts originally used for flavoring.

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Ph: 03 56223587 F: 03 5623 6309

E: [email protected] www.raymondpartners.com.au

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IMPORTANT DISCLAIMER: This e-magazine is issued to Raymond Partners Pty Ltd clients for their information. The information divulged in this magazine should not be taken as personal advice, and clients should not act solely on the basis of the information provided in this magazine. Items listed are general comments only and do not take into consideration your personal positions. You should seek our formal advice before acting in any of the mentioned areas.