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Five Tips to Keep Customers Happy This Summer

May 9, 2022 1 Comment

By: The Maine SBDC

Another busy summer is expected, providing both an opportunity and a challenge for small businesses across Maine. The ongoing labor shortage means that many businesses will again need to do more with less. Here you can find some basic customer service tips that can help businesses stand out. Click To Tweet

Start with Your Employees

Good customer service starts with you and your employees. Satisfied employees are more likely to provide better customer service, plus they are more likely to stick around. Retaining employees is not always an issue of pay; studies show that the workplace environment and culture can be just as important to employee morale.  Listening, responding, respecting, and supporting your employees is an excellent first step in delivering great customer service. Consider what perks you can offer to support your employees, whether it’s free coffee and bagels once a week or an end-of-summer bonus.
 

Get creative with your hiring.

Identify the most important traits you need employees to have and cast a wide net.  Often a cheery disposition and great attitude can outweigh experience; you can train a person how to clean a hotel room, but it’s really hard to change a personality.
 

Provide training on the key elements of customer service.

Maine’s Office of Tourism offers a free certification program called Welcome ME 2.0. In addition to training, establish guidelines that help regulate the conduct of your workers towards customers, management, and fellow workers. It is also important to identify behaviors that reflect your company’s culture and drive success.
 

Set Realistic Expectations

When working with fewer human resources, set realistic expectations. It’s better to under-promise and over-deliver than to have customers and employees disappointed. Like last summer, you may need to make modifications to your business such as limiting hours or days open, simplifying product offerings, and/or cutting back on service offerings. With both staffing and product shortages, it is more important than ever to make sure you have alternative vendors and service providers lined up in case of emergencies.  If you can’t get products in from your usual suppliers, where else can you turn in a pinch?
 
As you are making these changes, communication is absolutely essential to ensuring your new and existing customers are satisfied. Communicate using the signage on your business, your website, your social media, and in-person conversations. Again, it’s better to under-promise and over-deliver than have unhappy customers.
 

Be Welcoming to All

Overcoming barriers to customer service and achieving a culture of inclusion begins with understanding the needs of the people you serve. Consider the perspective of your customer. Are your customers those with young families, aging couples, or disabilities? Does your business welcome them? Make sure you are able to provide accessible accommodations that make them feel comfortable. Removing these barriers will be a simple way to make the experience a good one.
 

Personalize the Experience

“People will forget what you said, people will forget what you do, but they will remember how you made them feel.” – Maya Angelou
 
True service excellence makes the customer feel important, heard, and special. For repeat customers, try to remember their preferences and offer helpful information. For new customers, ask good questions, listen, and respond to their needs.
 
In order to provide personalized service, businesses need to understand what drives customer satisfaction and how to meet their needs. Offering your customers a unique experience will help differentiate yourself from your competitors.
 

Invite Customer Feedback

Embrace an approach that encourages your customers to create positive word-of-mouth marketing, which in turn will allow your business to innovate and meet the needs of customers. Listen to their suggestions and attend to their complaints promptly. When customers are delighted with their experience, they are more likely to return to your business or spread the word about your brand. So, make every moment count. This builds trust and engagement.
About the Author: The Maine SBDC program helps build and strengthen small businesses through business advising, training and educational resources. Certified business advisors provide guidance on topics such as business feasibility, business plan development, capital acquisition, financial management, marketing and sales, e-commerce, customer service, personnel management, small business strategic planning and more.

7 Reasons You May Have Been Denied Business Financing

April 18, 2022

By: Matthew Gillman

Getting your business loan application denied can be discouraging and frustrating, especially if you’ve been looking forward to that additional cash injection. However, if you’ve been in the business long enough, you know that it happens to many small business owners.

Lenders reject loan applications for several reasons, and knowing what those reasons are can do a lot in improving your chance of approval in the future. We’ve outlined seven possible issues that might lead to business financing denial, along with some quick fixes to each problem.

 

These are the 7 Reasons You May Have Been Denied Business Financing Click To Tweet

1. Poor Credit History

Poor credit scores or lack of credit history are among the most common reasons businesses get rejected for business financing. Credit scores help banks and other lenders determine your creditworthiness – or how likely you (or your business) are to pay them back. Generally, poor credit scores (below 650) raise a red flag to lenders and may result in outright business loan rejection.

A lot of factors come into the determination of your credit score. For instance, a recent bankruptcy could significantly bring your score down. The same goes for late payments and loan defaults. These will give the lenders the impression that you cannot handle your finances properly, which negatively affects your image as a borrower.

If a poor credit score is the main reason your loan application was rejected, here are a few things you can do to fix it.

  • Pay your debt obligations on or before the deadline
  • Work with suppliers or lenders that report to the major credit bureaus
  • Check your credit report regularly and report mistakes to the credit bureau ASAP

Some lenders may also offer financing options to businesses with poor credit scores. The downside is they may charge a higher interest rate to mitigate the risk.

2. Poor Cash Flow

If you’re applying for a loan, it’s also important to consider your business’ cash flow on top of your credit scores. Suppose there are gaps in this area or your company often experiences periods where revenue doesn’t match expenses (and debt repayments). In that case, lenders may reject applications based on that irregularity alone.

Lenders know that many small businesses fail because of poor cash flow management. With that, it’s crucial to monitor your business’ cash inflow and outflow. Make sure that there’s more coming in than out (at least for most of the year). Sometimes, late-paying customers can affect your cash flow, so make sure to adopt a more efficient process of payment collection (e.g., investing in robust accounting software).

3. High (or Too Low) Credit Utilization

Your credit utilization rate simply refers to the percentage of credit you used compared to the credit available to you. With a high credit utilization rate, lenders will assume that there won’t be enough cash to cover the additional financial obligation. On the other hand, too little credit utilization may demonstrate your poor experience in debt management, which also raises a red flag to small business lenders.

Businesses looking to apply for business financing should aim for a credit utilization rate of no more than 30%. That means if you have a credit limit of $100,000, you must keep your credit card balances below $30,000.

If you have a high credit utilization rate, one of the things you can do is pay down some of your existing debts, like credit cards. It’s also important to note that closing credit card accounts can decrease the amount of credit available to you, thus, increasing your credit utilization rate. That said, even if you’ve paid your credit card debt in full, keep the account open as much as possible.

4. Lack of Collateral

Lenders, especially banks, may require small businesses to pledge collateral to guarantee the loan. It could be commercial real estate, equipment, or other valuable business properties. Unfortunately, most small businesses may not have enough assets on their balance sheets to support the application. As a result, they often get turned down for business loans. Even if you have some assets, if the lender doesn’t view it as valuable enough, it will be harder to qualify for a business loan from banks.

If you’re faced with this situation, consider other forms of financing. For instance, invoice financing lets you use your customers’ outstanding invoices to advance capital. Other lenders may also offer unsecured business lines of credit to small business owners that don’t have enough assets. You can utilize these forms of financing until you have enough collateral to secure a more comprehensive business loan.

5. Short Business History

Lenders generally require businesses to have at least two years of business history before approving business loan applications. That is because such companies typically haven’t established enough credit or profitability history, making it harder for lenders to gauge their ability to repay the loan.

Startups commonly get rejected for business financing because of their lack of business history. Fortunately, they have more options now than ever. Alternative lenders may offer startup loans to companies that are less than a year old. The only downside is you might have to pay a higher interest rate. Nevertheless, it’s a viable option to consider if your business needs additional financing but you haven’t been in business long enough to qualify for larger loans.

6. Risky Industry

Traditional lenders may consider some industries riskier than others. For instance, service-based businesses like restaurants and construction are considered high-risk because of seasonality and high failure rates. Gambling or CBD businesses may find it challenging to secure financing from traditional banks considering the ever-changing regulations regarding their operations.

That is not to say that such businesses cannot acquire business financing. If your business is high-risk, you can seek funding from lenders specializing in lending to businesses in your industry. Not only will you increase your chances of approval, but you might even get better financing terms.

7. Lack of Documents

No matter how stellar your credit history or revenue is, you’ll most likely be rejected for business financing if you don’t submit the required documents. These documents serve as proof of your creditworthiness, convincing lenders that your loan application is worth approving. If you lack the necessary documents, lenders will have no way of confirming your credibility.

The next time you apply, be sure to have a checklist of what the lenders need. Aside from the primary documents like business leases, registrations, identification, bank statements, and tax returns, you’ll also need to prepare additional documents like:

  • Credit reports
  • Balance sheets
  • Profit and loss statements
  • Cash flow projections
  • Articles of incorporation
  • Business contracts

If you’re not sure what documents to prepare, it’s best to give the lenders a call and ask them what they usually require.

Bottom Line

Applying for business financing is not for the faint of heart. Rejections can happen, and they can be frustrating. However, by understanding the most common reasons for business financing rejection, you can fix them and improve your chances of approval in the future.

About the Author

Matthew Gillman is a business financing expert with more than a decade of experience in commercial lending. He is the founder and CEO of SMB Compass, a specialty finance company providing education and financing options for business owners.

How To Set Financial Goals For Your Business In 2022

December 20, 2021
By: Sharita Humphrey –

2022 is just right around the corner. One year closes and another is full of possibilities. Like a chapter in a book, the new year waits to be written — and so do your financial goals.

With all the uncertainties of this year and the last, it’s a good idea to be prepared for whatever may happen. It’s time to set financial goals to help you manage the ups and downs of running your business.

What Are Financial Goals?

Your financial goals are your plan for how much money you want to make in your business. These goals will guide how you run your business, spend your resources, and save. Your business financial goals are about things like profit and growth. You should also have personal money goals, which will give you a different perspective on how you make and spend money in your business. (more…)

These 5 Myths Cause Small Businesses to Fail

January 1, 2020
By Charles “Tee” Rowe –

Every year, Americans start businesses with the hope of achieving financial success, independence, and personal fulfillment. Unfortunately, many times those dreams are never realized. Too often the enthusiasm and energy that small business owners put into their business isn’t matched by the planning and skills needed to survive.

At America’s SBDCs — 62 small business development center networks nationwide and their nearly 1,000 centers — we find that a solid business plan and a brilliant business concept need to be married to a serious understanding of the financial and management needs of running a business.

Too many businesses believe marketing is their key to success, but hemorrhaging cash is the secret, silent killer. So for aspiring entrepreneurs, here are five myths small business owners believe in that lead to failure:

1. Don’t ask for help

“You’re smart, you’ve got this.” Nobody has got it. There are so many free resources out there, and the biggest mistake many small business owners make is not using those resources. There are nearly 1,000 small business development centers nationwide — why would you ignore free help? (more…)

7 Steps for Buying a Commercial Real Estate Property

December 23, 2019
By Michelle Black –

Building

Buying commercial real estate has the potential to be an excellent investment, often more so than residential properties. Yet even if you’re an experienced real estate investor, it’s crucial to understand that buying a commercial property isn’t the same as buying a house.

Before you purchase a commercial property, it helps to know the pros and cons of this type of investment. It’s also important to understand that with the chance for more reward often comes a higher purchase price and more risk.

How to Buy a Commercial Property: An In-Depth Review

1. Understand your motivations for investing in commercial real estate.

Why do you want to invest in commercial real estate? It’s an important question to ask yourself before you start hunting for properties. (more…)