Are Your Competitors Getting Ahead of You? How to Find Out

No matter how small or unique your niche, you have competition. These businesses are offering the same or similar products and services as you. The question is, are they doing it better than you?

That’s why every business needs to do a competitive analysis on a regular basis. You need to know who your competitors are, and how successful they are compared to you. An overview of what they’re doing differently may show areas where you need to improve, or where you should change your business strategy. It can also reveal their mistakes and weaknesses, giving you insight on what practices to avoid.

Let’s get started.

Who are your competitors?

First, list businesses that offer the same or similar products and services as yours. If you’re a realtor, this would include the other realtors in your area.

Then, think about businesses with different products/services but who are competing for the same customer. For example, the customer who wants to go out for an evening’s entertainment may choose a restaurant, nightclub, or movie theater.

What is their relative size?

Rate your competitors according to sales volume, number of locations, and so on. Where do you stand in comparison?

What is their USP (unique selling proposition)?

Analyze how each of your competitors differentiates itself from all the others. It may be lower prices, better customer service, faster delivery or unique designs.

How are they achieving their USP?

Look for specific techniques or processes that they use — and maybe you can imitate — to get their competitive advantage.

What do their customers think of them?

Check out online reviews about the quality of their products and services. Also, listen to word of mouth. Are they very well known and trusted because they’ve been in business for a long time? Are they seen as innovative and up-to-date because they’re making a big splash on social media?

How do their operations work?

Find out their pricing, order process, and delivery process. Does it work better than yours?

How can you get a competitive advantage?

Now that you have a clear idea of how and why your competitors are succeeding (or failing), you can look for ways to differentiate yourself. These might include:

• Patent or license: Your business is the only one that can produce that product.
• Exclusive distributorship: Your business is the only one that sells a particular brand.
• Secret process or recipe: Competitors can’t duplicate your results.
• Customer experience: Your large competitors can’t give such personalized attention.
• Lower costs: You can give customers the same product/service for less.

How open is the market to more competition?

The bigger success you are, the more people will want to duplicate it, and ultimately take away your customers. Are you in a growing niche where there’s an opportunity for more such businesses to move in or startup? Or is the market mature and saturated?

How well protected is your USP? Would it be easy for a newcomer to use your same idea, design, recipe, or process to produce the same or better products?

In a free-market economy like ours, competition is the name of the game. Knowing who your competitors are, their successes and failures, and how you stand in comparison to them, will go a long way toward helping you win that game.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Convenient Shipping: Shortcut to Customer Loyalty

Many online shoppers say that the biggest hassle in the purchase process is shipping. If you can turn that negative experience into a positive one, you’ll give yourself a clear competitive advantage. Check out these ideas for boosting business through shipping.

Who Pays?

There are a variety of options that you can offer. Here is a brief analysis of each one’s costs and benefits for you and your customers.

• Free Shipping
This option is fast becoming the norm, rather than the exception. Whether it’s viable for you depends on the size of your business and the type of merchandise you sell. However, if all your competitors are offering it, you’ll probably be forced to follow suit.

You may be able to offset shipping costs by raising product prices; but before you do that, do a price comparison with your competitors. In any case, as long as shipping costs are less than 20% of your retail price, you should be able to make it work.

• Real Cost Shipping
With this option, customers will pay the entire shipping charges, based on the size of the package, its weight, and how far its destination is from your shipping facility. Although this method assures customers they’re not being overcharged, they still don’t like that they can’t see exactly how much they’ll be paying until they’re far along in the checkout process.

This option will be of particular benefit to you if you ship unusually large or heavy packages, or if your package sizes vary widely.

• Flat Rate Shipping
In this option, you determine a shipping rate and apply it to all products across your inventory. The rate could be based on your historical costs, or simply a nominal amount that makes a good selling point while relieving you of some of the shipping costs (“$2 shipping on all items!”). It’s most cost-effective for sellers whose package sizes and weights are all pretty much the same.

Flat rate shipping saves you the time and headache of doing calculations and also allows customers to know what they’ll be paying before they get into the checkout system. On the other hand, it’s not as transparent — customers could wonder if they’re being overcharged.

• Expedited Shipping
The faster customers receive their orders, the happier they are. And most of them are willing to pay for same-day, 2-day or 3-day delivery if they really need it. This option should be available on your website.

Make a Memorable Last Impression
When the package arrives at your customer’s home, this is your final opportunity in the sales process to promote your business and enhance the customer experience. In fact, studies show that unique, high-quality packaging is more likely to stimulate a repeat purchase.

Consider designing your box to match your brand’s logo and colors. It could even be an unusual shape or size. Check out the possibilities for colored tape, stickers, and fillers such as tissue paper. Another trending strategy is to use eco-friendly packaging materials: boxes made of recycled or managed forest materials, non-toxic printing inks, biodegradable packing peanuts, etc. Naturally, this is a great additional marketing message to include within the materials.

Add in Sales Opportunities

Your shipping package is a golden opportunity to advertise additional products and services — at no extra cost. Simply toss one of these items in the box:

• Promotional Material
Include a copy of your latest catalog, discount coupon for their next purchase, new product flyer, or your business card.

• Free Gift or Sample
This is the single most effective way to increase sales, as customers get to experience a new product risk-free.

• Custom Note
If your business promotes its personalized customer service, a hand-written thank you note will reinforce that message. It lets small businesses stand out since large businesses aren’t able to do it.

Shipping can be so much more than a logistics chore. When you think of it as the first step in the next sale — rather than the last step in the current one — you can appreciate its potential to build your brand, increase customer loyalty and boost sales.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

To Buy or to Lease? That Is the Business Equipment Question

For many businesses, equipment will be their biggest expense. Whether its computers, manufacturing machinery, or vehicles, what may seem like the easiest answer right now might end up costing you more in the long term. Here are some factors to consider when deciding what’s right for you.

Cost

Buying the equipment will require a large initial investment, so if money is tight, leasing with a monthly payment may be easier to budget for. On the other hand, leasing usually costs more over the long term.

When you own the equipment outright, you can sell it later and recoup some of the cost. On the other hand, leased equipment can be traded in as new technology emerges or your needs change.

If you really want to buy but just don’t have the money, consider getting a loan that uses the equipment as collateral. Equipment financing often offers low-interest rates and affordable payments, so you can have the best of both worlds.

Shelf Life

Leasing is a good choice for equipment that needs to be updated frequently due to heavy wear or evolving technology. Be careful, though, that the lease terms don’t require you to hang onto outdated equipment longer than you want.

Leasing is also usually the way to go if you only need the equipment for a short time or a special project. Most business owners choose not to buy — and store — something they’ll only use a few times a year.

Product Selection

When you buy equipment, you can choose whatever you want, and even have it customized to your needs. With a leasing company, your options may be more limited.

On the other hand, since you’re not making a major financial commitment, leasing may encourage you to try new products and technologies.

Maintenance

When you own the equipment, you’re responsible for repairs and upkeep. You have to carry insurance on it, which is another expense. And if it’s so broken that it’s un-repairable and un-sellable, it will be a total loss. However, you can get it fixed on your own schedule and to your own specifications.

Maintenance of leased equipment is handled by the leasing company. This relieves you of expense, but you also lose control of when and how repairs are done. Plus, you may be liable if the equipment is damaged.

Taxes

Leasing equipment is usually 100% tax-deductible as an operating expense under the 179 IRS Tax Code.

Purchased equipment may or may not qualify for a tax incentive; check with your accounting professional. Even if it doesn’t, you can still take a deduction for depreciation. Also, the time of year that you make the purchase can affect your tax return.

Xendoo helps clients make the decision whether to buy or lease equipment, clarify long- and short-term costs and benefits of each option, and plan tax strategies. Each business is unique and requires personal attention and expertise. That’s just what Xendoo delivers.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

11 Reasons Online Billing Is Better

Are you still sending invoices as attachments to emails — or even paper bills in snail mail? There’s a better way. A way that automates much of the process, making it easier for both you and your customers. Below are just some of the things good online billing software can do:

1. Convert a quote to an invoice.

Customers accept the quote by clicking “Approve.” It’s then converted to an invoice, with no extra work or duplication of effort between your sales and receivables departments.

2. Automatically fill in prices.

You enter an item on the invoice and the software adds the price from your pricing schedule.

3. Automatically deduct sold items from inventory.

Keep your supplies status up to date without lifting a finger.

4. Create an invoice as a web page.

Get paid faster with this process. You send your customers a link to the page, and they can pay instantly without having to visit their bank’s website, call you or mail a check.

5. Eliminate the need to send revised invoices.

An online invoice also cuts down on error correction hassles. You can edit it right up to the moment your customer pays it.

6. Send an invoice from your mobile device.

If your business takes you out and about, you can still send an invoice the minute a job is finished.

7. Accept credit cards and online payment options.

Online billing software integrates easily with a credit card, debit card, direct bank debit, and online payment provider options such as Stripe, PayPal, and GoCardless.

8. Automatically reconcile bills and payments.

Link the billing software to your bank account and it will notify you when the bill has been paid, and when it’s overdue.

9. Automatically send past due reminders.

You schedule the reminder for a specified number of days overdue and enter a pre-written letter. The software does the rest, tracking dates, and sending the letters.

10. Reveal cash flow status.

See your receivables picture at a glance: how much should be coming in next week or month. Compare that figure to your predicted expenses to get early warning of a possible cash shortfall.

11. Simplify tax preparation.

Good online billing software can integrate with accounting software to automatically enter payments in your books and tax code them in real-time. Result: no last-minute headaches at tax-filing time.

Xendoo’s services include Xero Accounting Sofware that can meet all of your invoicing needs. It’s technology at its best, reducing payment times, saving hours of manual data entry, taking your business mobile, and more.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

8 Ways DIY Accounting Costs More Than It Saves

No matter how much they hate it, small business owners tend to do their own accounting. They’ll tell you they’d love to hire a bookkeeper, but they just can’t justify the expense.

What they don’t take into consideration is all the ways a professional CPA can cut business expenses, take advantage of savings opportunities, and avoid costly mistakes. Here’s what having a good accountant can do for you:

1. Find more tax breaks.

A good business accountant will claim expenses you may not have known were deductible. They can also advise on the timing of major purchases to take full advantage of tax credits and depreciation.

2. File taxes on time.

Late returns and other compliance paperwork will incur penalties and interest.

3. File accurate taxes.

Under-reporting how much you owe could lead to big trouble with the IRS, as well as state and local authorities if you collect sales tax.

4. Send invoices out on time.

An accountant will help you avoid a cash flow crisis by keeping up to speed with invoicing.

5. Track late payments.

Well-kept books should show you at a glance what you’re owed and when it’s due. No more need to spend time and money on collections efforts.

6. Eliminate data entry errors.

For the DIY bookkeeper, figuring out and fixing the mistake could take hours — which the small business owner could spend more profitably elsewhere.

7. Provide information for smart business decisions.

You should be able to spot right away when there’s an issue with cash flow, inventory, or profit margin, and take early corrective action. On the flip side, your accountant can point out opportunities for growth or reducing unnecessary costs.

8. Free you up to add value to your business.

Is it a smart use of your time to be doing data entry, tracking invoices/payments, reconciling bank accounts and control accounts, processing payroll, managing inventory, preparing tax documents, and so on?

“But I still can’t afford an accountant”

The benefits may be clear, but most owner-managers just don’t have the budget to add a full-time professional accountant. As small business specialists, we understand your position. That’s why we offer affordable monthly plans that cost less than half of what a traditional accountant typically charges (in a couple of hours!).

How to make the best use of your accountant

When you hire a professional consultant, you want to take advantage of the team’s expertise in showing you how to save money and make your business more profitable. You’d rather not have them spend all their time on routine tasks.

That’s why Xendoo uses state-of-the-art software that automates many such tasks, from entering sales transactions directly from your bank into your books to coding each entry as it happens so there’s no last-minute rush at tax time. Your accounting team is free to provide you with valuable advice, and you’re free to focus on your core business. Not to mention getting a good night’s sleep.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Sales Tax Economic Nexus Standards

The definitive 50-State roadmap

Remote sellers, including SaaS companies and online retailers, must navigate a regulatory free-for-all following the Supreme Court’s decision in “South Dakota v. Wayfair, Inc.

What’s changed with sales tax?

On June 21, 2018, the Supreme Court eliminated the requirement that only businesses with in-state physical presence were subject to sales tax. States now have the right to impose tax requirements on businesses with a certain level of economic activity in their state.

Where and when?

In the absence of the physical presence standard, many states have already enacted legislation effective as early as July 2018; others have set a date for implementation, and the remainder is weighing their options.

Who’s affected?

Online retailers selling goods and services in multiple states-not just e-commerce businesses, but also SaaS companies.

How much?

Just $10,000 could now trigger sales tax compliance requirements (nexus).

sales tax nexus by state

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Brewing Up Success: 4 Steps to Starting a Craft Brewery

So you’re thinking about taking your beer brewing hobby to the next level and starting a commercial brewery. You’re not alone — there are more than 5,000 craft breweries in the U.S. And the trend shows no signs of slowing down. According to the Brewers Association, in 2017, while overall national beer volume sales were down 1%, craft brewer sales were up 5%, with microbreweries accounting for most of that growth. Craft brands now own more than 23% of the total U.S. beer market.

These numbers are a great predictor of success, but they also mean you’ll have lots of competition. Here’s how to make sure you start off on the right foot and maximize your potential for becoming the brew of choice for discerning customers.

1. Make a Workable Business Plan

This is not the place to list all your grandest dreams. You need a realistic strategy and action plan if your business is going to survive. It should include:

• How your products are unique and different from the competition
• Size of the operation and its distribution area
• Marketing strategy: who you are selling to and how you are communicating to them
• Budget: cost of ingredients, packaging, equipment, overhead, shipping
• Goals: short term steps and long term vision
• Contingency plan: How you will handle unexpected expenses such as equipment breakdown or an unusually large order

One smart move that can save you from making many mistakes is to network with other craft brewery owners. Of course, they won’t share their secret formulas, but they’re usually happy to talk about what business strategies were successful for them.

2. Figure Out the Finances

Another big reason you need a business plan is that it will be required by any financial institution that you apply for a business loan or investment. Sit down and crunch the numbers on exactly what it will cost to set up the business and operate it for a year.

Then add a cushion for when things don’t go according to plan. There are always hitches in the early months of a start-up business, and you’ll be a lot less stressed when they happen if you know you have the money to solve the problem.

3. Learn the Legalities.

The brewing industry is fairly heavily regulated, on local, state, and national levels. You’ll need to know about:

• Federal and state licenses to operate a brewery
• Laws on sending your product across state lines
• Local wastewater disposal regulations

4. Set Up Your Supply Chain

As a hobbyist, you probably focused primarily on ingredients and formulas. As a commercial brewery, you will also be buying large quantities of bottles/barrels, labels and beverage gas. It’s essential to find suppliers you can rely on to provide consistent quality and on-time delivery because any failures will result in a setback for your business.

On the other side of your supply chain are the post-production services: sales reps or distributors, shipping, marketing. And throughout the process, you’ll need a bookkeeping system to manage inventory (both raw ingredients and finished product), cash flow, profit margins, payroll, and tax prep. Many of these activities can either be handled in-house or outsourced; the choice is yours.

As small business specialists, Xendoo provides expert advice along with real-time bookkeeping. We can help steer you around the pitfalls and toward opportunities for maximizing efficiencies and profits. We handle the accounting chores while you work on brewing up your dream business.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

2018 Tax Extension Deadlines for Businesses

Did you get an extension for filing your 2017 business income tax return? The charts below show the final deadline for each business entity type, by calendar year and another fiscal year. If you miss this date, you’ll be looking at penalties and interest on any unpaid taxes.

Businesses Using the Calendar Year

Business Entity Type Extension Deadline
Exempt organization August 15
S corporation September 17
Partnership September 17
LLC September 17
C corporation October 15
Individual October 15

Businesses Using an Alternative Fiscal Year

Business Entity Typ Extension Deadline
Exempt organization 3 months from the original due date
S corporation 6 months from the original due date
Partnership 6 months from the original due date
LLC 6 months from the original due date
C corporation 6 months from the original due date
Individual 6 months from the original due date

 

Make this the last year you have to ask for an extension! With Xendoo keeping your books, many routine tasks are automated so that you never have to worry about human error, delays, or a last-minute mountain of paperwork to get organized.

Xendoo sets you free to concentrate on doing what you love, and helping your business thrive.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.