Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

The Little Things

“People expect good service but few are willing to give it.” Robert Gately

I was having a meal at a restaurant today (Nandos) where I experienced a very high and professional level of service. This is a place I frequent occasionally. On some occasions the level of service is high for a mid tier eating place where the emphasis really is on turn-around time on the tables. However there have been occasions when the level of service has left a lot to be desired. Thinking about it today as we were being served and looked after by the individual assigned to our table, it really takes very little effort to make such an experience turn around from an average one to one that gets me blogging about it. There were a couple of things that I think were done really well:

1. We were greeted with a smile and asked about our day. That just made the entire relationship get off to a good start.

2. I wanted to make some difficult changes to what I was ordering and he made sure it got done without getting flustered. He did not give me a flat out yes or no when I asked him whether the changes could be done. He merely said he would do his best and let me know as soon as possible. Needless to say the changes were made and I was very happy when I got my meal.

3. During our meal he checked up on us a few times. He was never hovering around the table while we were eating, but was always there when we needed something.

4. Upon presenting the bill he asked us to fill out a feedback form on his service during the meal. This was a person who was serious about the job he was doing and was making sure that he got feedback to ensure he could do better.

The things listed above can surely be duplicated relatively easily among the staff of a restaurant. It depends largely on management to ensure that their staff provides customers with superior service and provide them the necessary training to help deliver it. The importance of good customer service is paramount irrespective of your  line of business.

Are you doing all that you can to ensure you give your customers the best level of customer service possible?

Related Posts:

Non Financial Metric #1: Customer Satisfaction

5 Steps to Better Customer Service

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5 Tips for Better Cash Flows

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” Warren Buffet

Mismanagement of cash flows is a leading cause of failure among businesses. Business owners do not realize how critical it is to budget and plan cash flows from the beginning of the venture and most times a liquidity crisis catches them completely off guard. This often leads to irrational last minute maneuvering which amplifies the problems at hand. To ensure smooth cash flow cycles we have to ensure that we are extremely vigilant of the financial health of our business from the onset. This may appear to be over simplistic advice, however the truth of the matter is, not enough emphasis is given to this function. The excitement lies in closing those million dollar deals and creating fancy marketing campaigns. Reality of the matter is that if we do not have the financial structure in place to support these deals and campaigns we will soon find ourselves in a lot of trouble. Listed below are a couple of tips which have helped me manage cash flows better.

1. Inflows & Outflows: From the onset identify your inflows and outflows. If you have adequate historic data, map out how long on average it takes to receive cash after providing your product/service. Next carefully map out all your expenses, and dates when they need to be paid. Next we have to minimize the time between the two flows. Usually inflows are much slower than expected and this needs to be compensated by negotiating favorable agreements with suppliers, stocking less and invoicing your customers at regular intervals. To learn more about the importance of mapping out inflows and outflows please click here.

2. Cost Management: Cost cuts do not necessarily require a business to layoff staff or drastically cut marketing expenditure. I take the approach of measuring cost effectiveness in terms of every product or service that the business is providing. The goal must be to provide the product or service at a lower cost than the competition. Identify all direct costs, incremental costs of increasing volume, fixed costs and overall cost structures in comparision to the competition. This does not necessarily have to be reflected in lower price points. As we widen the cost comparison between competitors, we are able to hold a much stronger position in the overall industry. To learn about each cost in greater detail please click here.

3. Marketing: Cutting marketing expenses to conserve cash is often not the most optimal solution for solving one’s cash flow problems. Assessing marketing strategies and tactics needs to be practiced on a regular basis. It is not wise to make marketing expenses cyclical with business cycles. With optimized marketing campaigns and strategies in place, a business has greater chances of avoiding these cash gluts as business is constantly being generated at a healthy level. To learn more about marketing strategies during a liquidity crunch please click here.

4. Technology: Gone are the days of keeping track of your business expenses on excel sheets. As a business owner today we should use one of the many accounting packages available to make sure we always have a financial snapshot of the health of our business. This will provide us with the ability to quickly identify trends and potential liquidity crunches before they take place. Please click here to read five questions you need to answer before selecting which accounting package is right for you.

5. Last Resort Measures: There will be times however when a liquidity crisis will hit . It is important that when it does we remain calm and evaluate the options we have instead of making rash decisions. The options I have used during these period of times are, discounting, credit cards, loans from friends and family, invoice factoring and secured credit lines. All of these options need to be used when all other alternatives have been exhausted. Attention needs to given to ensure that all documentation has been read carefully and that one is fully aware of the pro’s and con’s of each measure. To learn more about each measure please click here.

Those who have experienced liquidity crunches realize how stressful and frustrating these cycles are. They can result in partners leaving the business, unpleasantness at the office and even eventual closure of the business. Using some of the tips provided above we can avert a number of these situations. It comes down to better financial planning and catering for unforseen events. We have to be prepared when such situations arise and must deal with them face on. There is no need to dig ourselves deeper into a hole by using temporary fixes. If the business that you are running is repeatedly running into cash flow problems, do your best to re-engineer it from the ground up, or have the discipline to change boats.

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Getting out of a Cash Crunch

“When you’re in a pit, the first thing to do is to stop digging.” James Ellman

At some point of time or other most entrepreneurs go through a cash crunch period. These are stressful and frustrating times when the world seems to be falling apart around us and we have a limited set of options to get out of the mess. I have found that by following the tips provided earlier in this series we can reduce the probability of being stuck in a liquidity crisis substantially. However, there are times when even after having planned for every conceivable outcome there is a blind spot we missed out. The important thing to do at this point is not to panic. Cutting your marketing budget, laying off staff and hawking office equipment on ebay is not usually the answer. In a situation where we have exhausted options of negotiating extensions with suppliers and run out of excuses why we have not settled the rent, there are a couple of alternatives I have used. Listed below in order of my personal preference are:

1. Discounting: If we are in a quarter with a number of payments due I include a clause in outgoing invoices stating that if payment is made within x number of days there will be an x% discount. This creates monetary incentive for clients to pay up on time. If invoices have been pending for a while I give the same discount to the client stating they should pay the discounted bill or we would be forced into calling in collection agencies. Surprisingly I have had very good results using this method in speeding up payments causing strapped up cash.

2. Credit Cards: I personally do not advocate using this type of financing but when the situation calls for it, use it as an emergency backup. These can be either business applied credit cards or personal cards. Using the cash advance option, essential payments can be made. This will help tide through the business until payments are made by clients. Using this option for any other expenses other than these critical ones results in getting buried by ridiculously high interest payments. Instead of fueling growth for your business this stunts growth. Use it with caution

3. Loans from Friends & Family: If you are in desperate need of some bridging capital and need access to it quickly, going to friends and family is a valid option. I do not like mixing friends and family with business, but at times it is unavoidable. Make sure when you take the money there is an agreement with terms and conditions spelt out in black and white. Full disclosure must be made regarding the situation at hand as well as when you are expected to repay the loan. Conflicts tend to arise when inadequate information is given, this results in confusion and unrealistic expectations.

4. Invoice Factoring: For businesses with natural and steady flows of revenue, but prone to erratic payments, applying for these schemes through banks or specialist factoring companies is an option. These basically take into account your average business activity and streams of revenue, then provide you a credit line against it. This can free up much of your working capital and can boost growth. However read the fine print carefully. Sometimes these institutions limit who you can do business with, and can also force your clients to interact with them as far as payments are concerned. This reflects negatively on the business and does not convey a good image to your customers.

5. Secured Credit Lines: If one is expecting the next couple of quarters or year to be tight, taking out a secure credit line may be a good alternative to solve the liquidity crunch. The bank provides you with a line of credit which is usually secured against a particular asset. The asset is usually real estate which you or the business may own. The business is then able to borrow money against the asset conveniently. This is an option exercised by many entrepreneurs. However it takes time to setup, therefore one must plan for it well in advance and not when you are stuck in a liquidity crisis.

No one wants to be stuck in a liquidity crisis. We must do all we can to ensure the business does not slip into one. Keep your eyes on both the sale numbers and controlling expenses. When and if the situation becomes critical these last resort measures can provide significant relief in assisting you to get out of the mess. It is important to use these options wisely and to do thorough research on them before committing to any one of them.

Related Articles:

Raising Capital from Family & Friends

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Technology and Cash Flow Management

“What amount of value creation can be assigned to the efforts of management for a particular time period? That is the essence of accounting. Otherwise, it’s simply an appraisal process.” Charles W Mulford

Gone are the days of keeping track of your business expenses on excel sheets. Earlier on in my entrepreneurial journey we relied solely on excel sheets to manage accounts. However we were then introduced to Quickbooks, and it completely changed the way we viewed our accounts. With this software we were actually able to extrapolate a lot of data and zoom into key metrics by which we could monitor the growth of our business. Many business owners wait until they have an ‘established’ business before investing in standard accounting software. This is like wearing a helmet after you have experienced a fall. Undoubtedly experience is a great teacher and one should continue to learn from mistakes. There are however some precautions which should be taken beforehand, and getting software to manage your accounts is one of them.

There are many great accounting solutions available in the market today. These key questions need to be answered when selecting an accounting package:

1. What is your budget allocation for purchasing this software? (If a budget has not been allocated there are many free accounting solutions which one can find online)

2. Do you want the software to run locally on your computer or would you want web access to your data?

3. How many users will be using the software?

4. What is the primary purpose of purchasing the software? (Do you require a simple application which helps to track all of your incomes and expenses, or do you require one through which you can manage inventory, payroll, invoices etc)

5. What level of reporting will be required? (If one requires simple profit/loss, cash flow and balance sheet statements there are a lot of great packages out there. For more complex reporting, software like Quickbooks premier can generate detailed reports on sales report per employee and profitability per product)

Once these key questions have been answered, you will have a better idea for the sort of solution required and your search would have been made easier. When you have selected a software, assign someone or a group of people to continually update it to ensure access to the latest activity. This acts as a safeguard and protects over exposing the business to unnecessary risk as well as maximizing the opportunities currently in hand. I plan on creating a widget which will compile the answers to the questions above, and help provide a list of appropriate software or services. If anyone would like to help me out in creating it please let me know at blog (at) usmansheikh.net

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Exceeding Expectations

“There are no traffic jams along the extra mile.” Roger Staubach

My first company had the tag line “Exceeding your every expectation”. It was printed on everyone of our name cards and it pushed us to go the extra mile many a time. It is only after some years that I have realized, it does not take much to exceed customer expectation. They do not need elaborate gestures to make them feel special, all they need is to be treated honestly and fairly, to be provided with significant value for their purchase and to have all this done in a convenient and efficient manner.

From personal experience I know that there are many service providers I go to even though they may not be the cheapest, biggest or more convenient in the market. For example, all my computer needs and requirements are dealt with at a small shop I have been visiting for years. You may well ask why anyone would do this, in this day and  age of online ordering and convenience ? It comes down to the relationship I have with the owners of the store. It is good to walk into a store where everyone knows you by name and where you know you will always get that extra attention and exemplary customer service, whenever you walk in and need it.

As part of a startup , you need to identify areas where you can add greater value to your clients. You need to show them that you care about their success as much as they do. These are some of the ways I have used to go that extra mile :

1. Remember your customer’s birthdays and make sure you send out either an ecard or an actual card to show that they matter to your business.

2. Gather as much personal data regarding the customer as possible, such as hobbies, interests, family and  other information that may help you with future conversations as well as personalizing services.

3. Remember to thank the customer at the point of purchase and to follow it up with a note via email or mail, thanking them for their business.

4. Leave extra room for you to exceed their expectations. If you promised 5 days delivery time and deliver in three days, that goes a long way. Remember to leave yourself some wiggle room.

5. Put yourself in the customers shoes and ask yourself what you can do, to make the entire process more personable and enjoyable? Treat your customers the way you would like to be treated.

Going the extra mile is a defining and differentiating factor between good and great companies. Building such a culture from the start will provide you with clear competitive advantages. 

Do you have a special story of how you were wowed by a particular vendor?

Related Posts:

Sales and Relationships

 

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Learning from Experience

“Your most unhappy customers are your greatest source of learning.” Bill Gates

We have all been exposed to bad customer experiences. For those of us in the business or corporate world, we have also been on the receiving end when things didn’t work out as expected. That is part of life. Trying to please every customer to their complete satisfaction is a gargantuan and uphill task. However, it is essential to learn deeply from every complaint and put into place systems, which will take care of such incidents in the future. Listed below are a few pointers which should help expedite the learning process:

1. Refrain from pushing the blame onto external circumstances. Sometimes your supply chain gets delayed, it could be a mix up which your delivery system made or bad weather which resulted in your receiving a mouthful from your client. Accept the blame rather than pushing it onto someone else in the organization because that is the last thing an angry customer wants to hear. Once you have accepted the mistake you can go about resolving the issue in a more efficient and effective manner.

2. Extensively document the mistake. This will force you to think and put into a process the actual course of events and why they occurred. I have found the discovery process extremely interesting because you are forced to map out where the entire process started, who was responsible for what, at which stage and most importantly where we need to focus to ensure that the problem doesn’t happen again. It creates ownership in a business and a team constantly striving to deliver their best.

3. Finding the most efficient and effective solution. Once the mistake has been clearly identified the team should reach a collective decision regarding how to avoid a similar issue in the future. Control measures must be put into place and ensuring responsibility for its proper execution is essential. This is a critical step which should be documented and circulated to all team members to show that a decision has been taken.

Such experiences provide a great learning opportunity for the entire team. Once a mistake has been committed there is nothing we can to do to undo it, however , we can set into motion a series of actions which will alter the way we respond to them in the future. With a fanatical focus on ensuring that you cater to your customers every need and make the experience of doing business with you as seamless and comfortable as possible, will garner massive long term benefits.

What was your last customer experience horror story and did your organization do anything about it?

 

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Integrate Technology

“The purpose of a business is to create a mutually beneficial relationship between itself and those that it serves. When it does that well, it will be around tomorrow to do it some more.” John Woods

With escalating costs and the need to constantly maintain bottom line numbers, many companies are switching over to handling customer support services via technology platforms. Interactive Voice Response (IVR), Self Service Kiosks and online knowledge banks have greatly reduced costs for organizations, but, has an over reliance on these technologies resulted in a decrease in overall customer satisfaction?

Like most things in life, balance needs to be kept, so it is with integration of technology into your customer service function. The telco I was dealing with has an IVR service which you need to dial out from your mobile, since my phone was not able to make any outgoing calls the system directed me to another number which did not work either. At this point, I switched to the next logical source for information which was the website. The website did not have any knowledge banks relating to the issue at hand and did not even list the call center number I could call from a land line. In this day and age of web technologies this was disturbing. I ended up having to google several keywords to finally find the number.

The lesson to be learnt is, that focusing all your energy on just one touch point, such as a contact center is not the best of strategies, specially when deploying other web based and self service options are not as expensive. It is true that return on investment is marginal for these strategies, however, they lay the foundation for a much more holistic and comprehensive customer service solution for the future. Leveraging on tools for Customer Relationship Management (CRM) such as Salesforce, ZohoCRM, HighriseHQ can also be effective ways to keep track and even develop metrics around your customer service function.

Either way, as a startup organization you need to develop strategic roadmaps to help you handle customer service requests as you begin to scale. These will involve a number of technology solutions, what needs to be remembered when integrating is:

1. Keep a balance between technology and the human element.

2. Leverage on your website to provide detailed knowledge banks on prior complaints & questions.

3. Develop strategies to store and easily refer to archived customer interactions and data.

4. The ability to escalate complaints which have a higher level of priority.

5. Doing all of this while keeping it simple for the customer.

 

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Hiring the Right Individual

“As far as customers are concerned you are the company. This is not a burden, but the core of your job. You hold in your hands the power to keep customers coming back – perhaps even to make or break the company.” Anonymous

My extensive interaction with the telcos’ customer service department brought to the fore, the job vs responsibility concept which I have talked about briefly in previous posts. The concept is simple . When you are in hiring or partnering, you should look for individuals who are problem solvers and have it in them to go further than just completing the task at hand in a hierarchial manner. Those who willingly take the initiative to do more than is asked of them for the organization.

Customer service revolves around making all the touch points within your organization as simple, reliable and efficient as possible. Most of the time these touch points will result in a direct connection between customers and the employees of the organization. This is a critical connection, one upon which your business relies on heavily. It is therefore essential, when hiring individuals for this function, that you place relevant emphasis on the personality and temperament of these individuals. Bypassing this process because it has a high upfront cost and no apparent tangible return on investment is shortsighted. In the case of this particular telco, it has over 20m subscribers and a massive network of contact centers. At this point, to re-structure their hiring policies and procedures will be prohibitively costly. This is why a culture for superior customer service must be put in place from the start.

In essence if you are looking to develop world class customer service capabilities, you should hire individuals who:

1. Know the difference between a Job vs Responsibility.

2. Are truly passionate about helping others and problem solving .

3. Believe in the service/product that your organization provides.

These qualities may appear to be simple, yet many companies do not even factor them into the hiring process. Hiring the right kind of people for the job will give your organization the competitive advantage to help the customer choose you!

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Creating a Culture

“The first responsibility of a leader is to define reality. The last is to say thank you. In between, the leader is a servant.” Max DePree

Building an organization where you want exemplary customer service requires senior management to build a culture from the top down. If you are a new startup this should be an area which needs to be emphasized right from the beginning to help you create a culture which will permeate throughout the organization when you scale. So how do you go about creating a culture for customer service?

1. Make customer service as objective and tangible as possible. Place benchmarks on just about everything which relates to the customer from the time it takes for you to reply to an email, send out a quotation to delivering the product. Customer satisfaction surveys should be in place to help you assess how satisfied the customer was with the product/service, how you are doing with trouble shooting over the phone and email and what needs to be done to increase the customer’s level of satisfaction.

2. Once certain procedures and benchmarks are in place, training to optimize the level of customer service must be provided on these processes. This will equip your employees to better understand, perform and serve customers. It also reflects how serious the organization is about this function. A lot of great companies such as Disney, Starbucks and Commerce Bank are prime examples of how intense training from the time you are hired has created a world class customer service culture.

3. Showcase and reward staff who display outstanding customer service. Employee recognition sends a message through the organization and creates personal benchmarks for everyone to achieve. It motivates them to perform at their highest level and this sets a much higher standard in the organization.

4. If you do hire an employee who ends up not sharing the same core values relating to customer service, as senior management, you should let those employees go as soon as possible. This shows how important senior management takes this function and their level of dedication to delivering the highest levels of service.

During the 30 hour period while I was disconnected I probably spoke to approximately 20 representatives at the organization. I went to their office, talked with them on the phone and exchanged emails. All three contact points gave me a completely different experience. I came across different types of individuals some who took their jobs seriously and others who simply couldn’t care less.

Being entrepreneurs and individuals responsible for the direction our companies take we need to establish a culture for superior customer service from the start. This will ensure that when we eventually scale, these values will be deeply embedded and scaled likewise as well.

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Please hold your call is important to us

“The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer.” Peter Drucker 

Those are 8 words I really do not  enjoy hearing from a machine, especially when I am not having the best of days. In this day and age when customer service is a deciding factor in whether a company is successful or not I am continually surprised by the lack of importance given to this function. This blog series was inspired by a nightmarish episode of customer support at one of the largest telco’s in the country. It took them approximately 30 hours to reconnect me with the world.

During this 30 hour period I went through a gamut of emotions ranging from diabolical anger, confusion, disappointment, curiosity, denial to euphoric happiness. I learnt about the intricacies of mammoth call centers, the lack of sufficient support systems, just how insignificant one complaint can be when you process thousands of such queries every hour and how destructive one such incident can be to a company’s reputation. (Lost Laptop = $54m , Bloggers reaction) The internet has transformed the voice of the customer and corporations must definitely factor this into their customer service strategy.

Over the course of this week I will be talking about how to put customer service into your startup strategy from the word go and other topics related to improving and focusing on the customer service department. We have to carefully balance technology with human element to ensure that customer issues are resolved promptly and efficiently. However contrary to common belief, that the customer is always right, this author & blogger has generated a lot of buzz promoting the fact that the customer is ‘not’ always right. What do you think?

What was the worst customer service experience you have been through? How do you think the company could have reacted differently to address your complaints? I look forward to hearing from all of you.

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