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.

 

KPIs: Tailor Made Measures of Success

How healthy is your business? What areas need improvement? Where are the opportunities for future growth? These are some of the questions that key performance indicators (KPIs) can help answer.

What is a KPI?

It’s a measurement, number, or statistic that reports on some aspect of your business. Sales volume, customer satisfaction ratings, debt ratio — those are all KPIs. They tell you whether you are meeting your goals. Plug those numbers into a timeline graph, and they reveal trends.

Any business can benefit from using KPIs because you can customize them to reflect your unique situation. If your business is providing customer services, you’ll want to include some metrics on customer acquisition and retention. If you are a retailer, your KPIs should track inventory turnover.

In addition to measuring business performance overall, you may also want to set specific KPIs for different departments. For example, you might want to monitor specific activities of your sales force or work crews.

Choosing your KPIs

Key performance indicators can help you increase profitability, decrease inefficiencies, reduce your financial and credit risks, and much more. There are three general types of KPIs:
• Efficiency: Staff productivity; wastage/shrinkage; overhead costs; resource management
• Growth: Sales volume, gross revenue, and net revenue; business equity
• Health: Debt-to-equity ratio; average margins; net profit percentage; inventory levels vs. payables; debtor days
• Marketing: Website traffic, online conversion rate, email open rates

When thinking about the KPIs your business will utilize, you should also bear in mind:

• Your industry
• Where you’re located
• The size of your business
• What business life cycle stage you’re in (launch, expansion, maturity)
• Short-term goals
• Long-term goals

Keep the big picture in focus

Although these metrics are extremely useful, they must be viewed through the lens of your experience. For example, a drop in sales during the summer months may be perfectly normal if your business is snow removal. There’s no need to look for a remedy if there’s not really a problem.

It’s also important to review your KPIs on a regular basis. You don’t want to find out you have an inventory shrinkage problem when it’s been going on for a year already.

Your dedicated CPA team at Xendoo can help you choose the smartest KPIs for your business. What’s more, our automated software, 24/7 access, and timely reports make it easy for you to monitor those KPIs. You’re empowered to make the right decisions at the right time, and watch 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.

 

How Will the European GDPR Impact Your Business?

We’ve all seen the news reports about companies collecting and sharing customers’ personal information without their knowledge or consent, not keeping sensitive information private, and not adequately protecting their systems from hackers. Now the European Union has done something about it, by enacting the GDPR (General Data Protection Regulation) in May 2018.

But what does that mean to you?

If you have customers, employees, suppliers, or other business associates who live in the EU, obviously you will need to change your business practices to comply with the GDPR. (The UK will have similar statutes after Brexit.) Even if you don’t, it’s a good idea to become familiar with its mandates — so you’ll be ready when the U.S. institutes its own regulations.

What the GDPR protects

Any type of personal data is covered by the GDPR. This includes names, contact info, credit card/bank account numbers, medical records, and more. It requires businesses who collect this data to:

• Have a legal reason for doing so and use it ONLY for that purpose. For example, a customer might give you his email address so that you can send info about your products.

• Make user terms and conditions (such as for your website) clear, easy to understand, and easy to find.

• Respond within one month to individuals asking to know what information on them the business is holding; and not charge a fee for doing so.

• Erase all stored data about a customer upon their request unless the data is needed for legal reasons such as tax filing.

• Provide a digital copy of personal data to individuals upon request; they can use it in any way they want, including moving their account to a different business.

• Report certain types of the data breach to the relevant supervisory authority.

• When transferring data to a U.S.-based company for storage or processing, the company must be certified with Privacy Shield.

What steps you should take

A comprehensive review of your data collection, storage, and usage will be needed to ensure GDPR compliance.

• Find out which of your products and services are collecting and processing personal data.

• Analyze whether they have a legal basis for doing so.

• Check that these systems are secure from hackers and unauthorized users.

• Develop response procedures for customers’ data requests, such as disclosure, erasure, and portability.

• Update internal and external notices and contracts to be GDPR compliant.

• Assign responsibility for data protection to someone in your business.

• Provide data privacy training for all staff who work with the data.

As you can see, there are many aspects of data protection, but what they all boil down to is treating your customers’ privacy and rights as if they were your own. Maintaining mutual respect and high ethical standards is not just the law, it’s good 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.

 

Burning It Out: 5 Ways for Food Trucks to Improve Productivity

Operating a food truck, you’re crazy busy. You’re probably thinking it’s impossible to do more than you already are, yet you know that if you don’t do more, you won’t make more.

The secret is to put your time and energy where it will bring the greatest rewards, and reduce or eliminate the activities that don’t pay off. In these tips, we’ll share some ideas for increasing productivity without increasing effort.

Cut down on distractions.

Do you feel as if you’re constantly being pulled two or three different ways? This is one of the biggest time-wasters in any type of business since the human brain works fastest when it can focus on one task at a time.
• Stay off your phone, email, and social media except for set times of the day.
• Tell friends and family to only contact you at work if it’s a real emergency.
• Do your business planning and analysis alone or with one expert adviser.
• Don’t let staff disagreements drag on, hold a meeting to resolve them.

Work on a schedule.

As long as you’re always reacting to the moment, you’ll never have time to act for the future. Even though running a food truck isn’t as predictably routine as some other types of business, some tasks have to be done every day, week, or month. Write the deadline down on a calendar and it becomes manageable, rather than a last-minute crisis.

The schedule doesn’t have to be super-tight or exact. Allowing time for breaks and unexpected developments makes it more likely that you’ll be able to stick to it.

Figure out which activities have a low rate of return.

This may actually take more time upfront as you test various alternatives. But it will save you much more time down the road when you’re not wasting it on tasks that won’t benefit your business.

For example, when you put out the word about your truck on FaceBook, Twitter, Instagram, Snapchat, or other social media, which of them are actually bringing in customers? Get rid of the channels that aren’t paying their way.

Finesse your inventory.

Not having enough or having too much of the ingredients you cook with is a huge productivity issue in the foodservice industry. The right POS system can automatically track sales and supplies, warn you when you need to reorder, and best of all, save you and your staff hours of physically counting the stock.

Delegate.

To maximize your productivity, you should spend your time on what made your business a success in the first place, and let others do the routine chores or the things you’re not so good at.

If your competitive edge is recipe development, focus on that and let someone else chop the onions. If you’re not good at business management and accounting, let an expert handle those areas. You may choose to hire a full-time accountant, or for a low monthly fee work with an accounting firm such as Xendoo.

As small business experts, we can relieve you of routine bookkeeping chores, provide you with information and advice on your financials, file your taxes, and more. Meanwhile, you have the time to make your food truck more productive and successful than ever.

 

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.

 

Crowdfunding 101: How to Crowdfund Your Next Business Idea

Entrepreneurs looking to start their own businesses now have more options than ever before when it comes to financing their ventures. A traditional loan (from a bank or family and friends) or bootstrapping the business yourself are still viable ways to get started. But there’s also a new kid on the block who goes by the name “crowdfunding.”

What exactly is crowdfunding?

Crowdfunding, or crowdsourcing, is a way of raising money from lots of people at once who learn about your business idea online. People pledge money in support of the company or product with the promise of perks or free stuff in return (like fan merch or the actual product, when it finally hits the market). In some cases, investors receive unlisted company shares for their pledged dollars.

Sounds like a great solution! Are there any downsides?

There are a lot of benefits to crowdfunding your startup. The cost and barrier to entry are relatively low, with crowdfunding websites listing all sorts of weird and wacky projects. When used properly, these sites can offer you high visibility before you even go to the market and give you an opportunity to interact directly with potential customers who have feedback or questions.

But crowdfunding isn’t for everyone, and there are some risks. By going public with your idea before you have any intellectual property protection, someone could potentially steal your concept and go to market faster than you. You also need to be able to effectively manage questions and critiques without them damaging your brand’s reputation.

Crowdfunding comes with a hefty responsibility since you must be able to fulfill the project and satisfy your backers. There are many stories of infant companies who have crowdfunded an idea only to discover that it will take much more time or money to build the product. This could leave you with hundreds of angry pledgers wondering what you’re doing with their hard-earned cash.

I understand the risks and I think crowdfunding is the way to go. How do I get started?

Before you go public on a crowdfunding site, make sure you have a detailed business plan. Not only will this help convince backers you’re serious, but it will also allow you to prepare for the future and understand what kind of investment it will take to go forward. Consider developing branding, sketching out a prototype, or filming a brief video that quickly gets your ideas across.

Once you’re ready to publish a page on a crowdfunding site like Kickstarter, Indiegogo, or GoFundMe, do some homework on which platform is right for you. Each one has its own limitations when it comes to the location of backers and the ability to reach them. Make sure you read the fine print when it comes to the fees, too. Even if your crowdfunding attempt fails, these sites will take a cut of your pledges.

Most importantly, surround yourself with advisors and a team who can walk with you through the entire process. Put your best foot forward and who knows — you might just end up the next big crowdfunding success story!

 

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.

 

The Perfect Fit: Tailoring Your Inventory Management System for Your Business

Many types of small businesses, from restaurants to manufacturers to retail stores, have stocks of supplies or products that must be maintained efficiently in order to optimize cash flow, prevent waste or shortages, and protect profit margins. So how do you know if your inventory management system is truly serving your needs?

Ask yourself these questions. The answers will reveal your system’s strengths as well as areas for improvement.

What type of inventory do you carry?

You probably have one or more of these three main types:

  • Raw materials. These are the supplies that go into making your final product, such as foodstuffs if you’re a restaurant or fabric if you’re a clothing manufacturer.
  • Work in progress. These items are in the making but not yet finished and ready to sell. Your pizza dough is mixed and portioned, but not yet baked, or your garments are cut out but not yet sewn together.
  • Finished products. This stock is ready to sell and ship to customers, either wholesale or retail.

The type(s) of inventory you carry will dictate your storage requirements, tracking practices, and reordering protocols.

How well can you predict future inventory needs?

Do you know how much stock you should have on hand at any given time? If not, you risk having either too little and losing customers, or too much and hindering your cash flow.

To improve the accuracy of your reorders, base them on concrete historical data rather than general experience. Your accounting software should be able to easily generate reports including:

  • Best selling items (which will need more stock than the others)
  • Seasonal fluctuations in sales volume
  • Trends in sales of specific items
  • Revenue and profit on each item
  • Differences between the physical store and online sales

This information is not only essential to inventory management, but it can also help you make the right decisions about your product assortments and keep your business growing strong.

 

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.

 

3 Areas of Your Business that Need a Spring Clean

It’s not just your home that benefits from a regular tidying up and weeding out. Your business will also be easier to manage once it’s reorganized and de-cluttered. Here are some great tips that can save you time and money all year long.

1. Records

  • Move all paperwork related to completed jobs and 2017 activity into storage.
  • Use that newly freed-up space in the filing cabinet to clear your desk of everything not immediately necessary.
  • Do the same for digital files on your computer, server, or the cloud. Delete, compress or archive them externally.
  • And how about your computer’s desktop — are all those icons helping or hindering your ability to find something quickly?
  • Scan hand-written notes and file them digitally so you can throw out the paper.

2. Communications

  • Email detox: Archive all emails not related to current activity.
  • Organize the emails you’re keeping into folders so you can easily find them again.
  • Create rules or filters for certain email subject lines.
  • Unsubscribe from sales emails that take up too much of your inbox real estate.
  • What frequent emails can you automate using technology?

3. Financials

  • Revisit your small business loans. Are better rates available?
  • Ditto for utilities, shipping, and any other services your small business uses. There may be more and better options since the last time you did your research.
  • Get caught up on your accounting and bookkeeping. Delegate this task to an expert CPA team.
  • Consolidate inventory and re-evaluate products that are not selling.
  • Do a competitive comparison. Have competitors’ products, services, and prices changed in relation to yours? This could be a signal that the market is changing.

If this seems like a daunting list, just pick the ones that are most important to your small business, or that you feel need the most improvement. And remember, you don’t have to do it all by yourself.   Some tasks may call for professional assistance. Xendoo offers bookkeeping catch-up services that can wipe out nearly any backlog in less than two weeks — even if you’re years behind. Let’s clear the decks so that your business can move forward in 2018!

 

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.

 

Applying for a Small Business Loan: 5 Steps to Success

Financing is a fact of life for any business, whether it’s to fund a new start-up, expand/update your existing business, or solve a temporary cash-flow issue. The best way to be successful in getting that loan is to be prepared with all the answers a bank needs to decide in your favor.

Here are 5 suggestions to pave the way to being approved for a business loan.

1. Research potential lenders online

Don’t just consider large commercial banks. Other, possibly easier, options include:

  • Smaller regional banks
  • Credit unions
  • Micro-lending organizations
  • Online marketplaces

2. Know your credit history and credit score.

The lender will definitely be checking to see whether you are able to repay their loan. If there are any errors or red flags that you can fix, get it done before they request the report.

Here are some steps you can take

  • Pull a fresh credit report online
  • Review and challenge discrepancies

3. Obtain expert advice.

There’s no point in flying blind when free help is available for the asking.

  • Consult your trusted advisors
  • Speak with fellow business owners

Check out episodes of “Shark Tank.” Although the “Sharks” are investors (becoming part owners of the business), not lenders, you’ll get an idea of the questions a loan officer might ask you.

4. Update your financials

Up-to-date monthly balance sheets and profit and loss statements are a great indicator of a business’s financial health. Understanding your historical business performance will give your lender confidence in your business’ direction.

To demonstrate your credit-worthiness, include documentation such as:

  • Past financial statements
  • Assets you will use to secure the loan, such as a property you own or purchase orders from your customers
  • Brochure, website link and other marketing materials for your products/services

5. Choosing the right loan vehicle

In today’s ever-changing business environment, there are many types of loans from purchase order financing to secured, unsecured, lease or purchase.  Depending on the type of loan to choose varies based on:

  • Desired end result
  • Interest rate importance
  • Terms of the loan

If you need help putting together the financial plan for your loan application, your dedicated Xendoo CPA team can provide you with your balance sheets, profit and loss statements, tax returns and more. Let’s get started!

 

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.

 

Rolling in the Dough: 5 ways to make your restaurant or food truck more profitable

The restaurant business can be growl- I mean, grueling. An astounding 60% of restaurants close or change ownership in the first three years. If you plan to beat the odds, you must focus on making your restaurant profitable as soon as possible. Here are five ways to make sure you’re not leaving any profit on the table.

1. Know your numbers

Do you know the exact percentage of your food cost during any given time of year? Do you forecast sales and use those figures to schedule staff and control inventory? If not, it’s time to get a handle on your restaurant’s numbers so you can make decisions based on more than your gut. Here’s even more on controlling your food/labor costs and how to prevent food waste.

2. Determine your role and hire the best

When it comes to operating a restaurant, it may not be a bad thing to have too many cooks in the kitchen. Beginning with a great front-of-house that warmly greets customers and manages crowds, to servers who are on their a-game, all the way back to solid cooks, bartenders, and bussers – hiring experienced, teachable staff, helps guarantee a great customer experience every time. But don’t rely on what they already know: making sure your team is trained and updated with weekly meetings help them help you run a better restaurant.

3. Offer a take out menu

Take out orders do two great things: keep your kitchen busy and leave the dining room open for more customers. Offering a modified version of your menu for hungry diners so they can take your food home will help you bring more bacon home (see what I did there?).

4. Put customers first

A disappointing dining experience may not just stay at your restaurant. With the ability to “check-in” online, leave reviews, or even just rant to their personal followers, diners now have a megaphone to share their experiences and they won’t be afraid to use it. That’s why it’s more important than ever to make good on a bad meal before the guest gets their check. If you need to, comp a dish (or the whole meal) or offer a free dessert. And don’t forget to give a coupon good for a future visit so they give you a second chance. The loss you’ll take on these items is far less than the loss of customers resulting from a poor online review.

5. Don’t wait till it’s too late to market

Even if the business is booming, restaurant owners should never rest on their laurels. The scene is always changing and new competition looking to steal your lunch could pop up at any time. Always have a solid marketing plan in place that, at the very least, includes an attractive, easy-to-use website and updated social media pages. When you’re ready to take things to the next level, get creative with digital marketing, local print advertising, or mass marketing tools like radio and TV.

Follow these five tips and you’ll be on your way to a more profitable restaurant or food truck. If you’re looking for even more ways to save during tax time, check out Seven Tax Tips for Restaurant Owners.

 

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.