So, since it’s so closely related to what I was just talking about a couple of days ago, I just had to share this article, too. Find it at The Globe and Mail. The article is written by Mark Evans, a consultant who uses content and social media to help businesses get more attention.

Evans writes that customer service is not just about correcting bad things from happening but also about building and leveraging a positive experience. For example, he mentions connecting with the customer to touch base with them and to show them that you value the relationship. And here’s how Freshbooks plays into the subject: Evans quotes Mike McDerment, CEO of Freshbooks, who says that a happy customer provides referrals. Although I might have disagreed with this a few years ago, I think that today’s socially connected world makes that true now. Just look at what interactions are like on Twitter: One person might tweet “boo! Invoicing day. My least favorite day of the month.” And someone else might respond with “Try Freshbooks. I like them.” A simple referral from a happy customer can go a long way.

And just when I thought I was wrapping up the topic, there was a link at the bottom of the article to a blog by Ben Yoskovitz. Yoskovitz is an entrepreneur with an impressive background and lots of interesting things to say and in his blog post , he reviewed the book BAM: Delivering Customer Service in a Self-Service World. His review/summary is incredibly helpful as he lists 9 points from the book that every entrepreneur should pay attention to. Number 1: Tie customer service to revenue and profits. Brilliant! Number 5: Tie customer service to surprise. There are others but those were my two favorites. Read this blog , change your customer service, and transform your customer’s experience!

Jessica Routier, IAC-EZ

Customer service has shifted yet again. Customer service used to not exist at all. Then, it was its own department – just a guy with a phone. Then it became trendy to call the sales staff “customer service” (even though they did mostly selling and almost no back-end support service). Today, lots of businesses claim to have great customer service but  really don’t.

The reason, as suggested in this excellent (but slightly older) post by Freshbooks, there is no clear and obvious ROI in customer service. Rather, the Sales department has clear metrics – sold products or not – but “happy customers” is ethereal at best. So, because companies can’t easily quantify the customer service experience, the customer service department (or skillset) is often the first thing to go. 

Unfortunately, that’s a mistake. A business may not easily be able to quantify customer service with obvious and conventional metrics, but the results of customer service are clear. If you ask me, I think customer service metrics can be found in the following places:

• Customer retention
• Long term profitability
• Ratio of positive-to-negative statements on social networking sites

How can your business make an investment into customer service? Here are a few ideas:

• If you can’t afford to hire someone new, train your staff to watch for negative customer service signs and – this is huge – empower them to address those signs immediately.
• Run frequent searches on various social networking sites for references to your company. For example, use HootSuite or Tweetdeck to keep a search running for the name of your company (along with various misspellings) to see what people are saying.
• Google the name of your company plus the words “hate” or “sucks” and see what comes up. While you may not be able to address every concern of a vocal minority, it’s a good way to see where some potential common problems are.

 Jessicca Routier, IAC-EZ

So what makes a borrower a high risk borrower? There are a few factors that include your likelihood to pay back money based on your history of paying back money.

But there’s also something called the debt-to-income ratio. This is the amount of monthly debt payments you make compared to your monthly income. It’s a number that consumers don’t often think of because those numbers are frequently disassociated in their minds but lenders are very aware! They want to know, essentially, how much of your monthly income goes towards your monthly debt. Too much of it is cause for concern because it hints that you’ve been buying on future earnings.

If you want to read more about the debt-to-income (DTI) ratio, visit FiveCentNickel.com and read “Your Debt-to-Income Ratio: What it is and why you should care“.

Each year, cancer claims the lives of over 7 million people, and that number is rising so dramatically that it’s expected to get as high as 18 million per year over the next 2 decades. Something must be done!

Some cancer-related organizations work at education or improving the lives of those who have been affected by cancer; those are important causes, too, and we supported those with a donation in February last year. But CRI was chosen this year because the money raised goes towards supporting laboratory research to find a cure for cancer.

In December, thanks to the new sign-ups, we were able to give $214 to Cancer Research Institute for laboratory research.

Jessica Routier, IAC-EZ

On the “should” side: Collect the right amount of taxes. Keep honest books. Report all income. Pay your taxes.

On the “shouldn’t” side: Run two books. Report only some income. Don’t pay your taxes.

However, just because you SHOULD pay your taxes, doesn’t mean that you can’t try to pay less… as long as your tax minimization is legal. And that is ultimately the difference between tax avoidance and tax evasion.

Tax avoidance is completely legal and it’s something that every single tax payer can choose to do. (Of course, the IRS doesn’t make it easy because their tax code is so unwieldy and complex that even IRS people don’t always understand it). It’s basically making lifestyle and (legal) tax-reporting choices that will minimize the amount of tax that you have owing on the correct amount of income.

Tax evasion is illegal. This is where you make lifestyle and tax-reporting choices that paint a false picture of your income and expenses in order to minimize the amount of tax you have owning.

Want to know more about the difference between tax avoidance and tax evasion? You can read this article at KenyanTykoon.

Jessica Routier, IAC-EZ

I don’t hear that kind of thing often enough in business – too many business owners just add up revenue for the day and hope that it covers their bills.

Right after talking to my colleague about his incorrect and newly corrected metric, I found this article which I thought was appropriate to him… and perhaps to you. It’s published at Money.CNN.com and is called “EVA Momentum: A New Way to Valuate Companies“.

In the article, they highlight how the executives at the now-dead Lehman Brothers were so focused on Return On Equity (ROE) that they made bad decisions but never fully understood the implications of those decisions because they weren’t impacting the numbers. And, the article goes on to say that this is common with other businesses that focus too much on other metric like gross margin or earnings per share (EPS). Then the article puts forward a new metric that it says is bulletproof and potentially the best metric that investors can use to analyze a business (and businesses can use to analyze themselves).

Before I get to the metric itself, let me say a couple of points of clarification: I’m sure that the executives at Lehman Brothers may have been focused on ROE but still made risky decisions and knew they were doing so. Also, I’m sure that this “bulletproof” metric might be really good but we may eventually discover that it is not as magical as we thought it was.

Okay, so here’s the metric: It’s called EVA Momentum. EVA stands for Economic Value Added and it is basically a company’s profit after deducting all the capital in the business. EVA Momentum measures the change in a company’s EVA divided by the prior period’s sales. Read the article for a nice clear example.

I realize that this might be pretty specialized for some users, but for others, it could be the metric you’ve been looking for to rate the health of your company (or your investments).

Think about it and let me know your reactions.

Jessica Routier, IAC-EZ

In this blog by CPA James Maertin, he lists a number of really useful tax breaks for a number of situations. Not all of these will apply to you, but some might!  Read: “List of Tax Deductions.” Oh, and be sure to scroll down to check out his list of expenses that cannot be deducted.

Here’s a list from AllBusiness.com listing “Top 10 Tax Tips for Small and Growing Businesses.”

Forbes produced this list of “Last Minute Small Business Tax Tips”. It’s from several months ago but it’s still relevant, and you might want to apply some of these to your business practices this year to get the tax benefit at the end of 2010. Read it here.

And here’s an article from CNN Money called “Small Business Tax Tips: How to Keep More Cash.”

I thought you might also like this contrarian point of view that looks at five tax deductions many people enjoy but highlights why they aren’t as good as some might think. Read the blog at SmartMoney.com.

And for all of you small business owners out there (that’s basically all of the readers on this blog), here is a list of some of the IRS’ changes to the small business tax code for this year.

- Jessica Routier, IAC-EZ

But it’s important for small businesses to understand this stuff. The problem is, small businesses don’t buy into the importance of risk management until they become bigger. They are just as exposed to risk as bigger companies but they are often underinsured, over-extended, and ill-prepared for when risks become realities.

If you are breathing a sigh of relief because you are still in business after what seems like the worst of the recession is over, STOP feeling relieved. Your business is still in danger. And many businesses (perhaps yours?) are not prepared for risks.

Please take a moment as soon as you are done reading this blog and list the potential things that could happen to you. Then, figure out how to prepare for it. (Yeah, it’s depressing. Yeah, you’d much rather be playing with your cat or doing billable work. I get that. But risk preparation will save you thousands of dollars and hundreds of hours of your time.)

For example, if you live in an area where hurricanes are frequent, think about how your business can continue should a hurricane strike. Will your customers get their work if you lose power or experience flooding? A solution might be as simple as getting work out the door as quickly as possible and saving all work to multiple off-site servers.

I don’t need to tell you that mother nature isn’t the only potential risk that businesses face (it’s just often the least predictable). There are other risks, as the article at CFO.com suggests. In fact, they highlight liquidity and crime – both are key risks that you might be able to control with wise investments and careful planning. Maybe the addition of insurance or even just a better lock on your door.

Read the article here. Then, make your risk list. Then, figure out how to mitigate those risks.

The truth is, most businesses will click away after this blog and think “that’s not a bad idea, maybe I should do that someday”… but it’s the businesses that actually do it that will survive the next catastrophe.

Jessica Routier, IAC-EZ

He was quick to point out that a highly engaging blog is a good thing, and it’s okay to read outside of your specific industry, but this blog was basically keeping him from working. “My time,” he said, “has a price tag on it. If a blog doesn’t educate or inform me or help me to grow my business, I’m not going to do it during work time.”

There is a fine balance and self employed people have a hard time finding and maintaining that balance. A few minutes of Farmville on Facebook isn’t a big deal. Even hours of it isn’t that big of a deal… if you still have time to do your work. But the real problem is when a few minutes turns into a few hours during work time!

People who sell products don’t always see the same challenge as people who sell services. That’s because a product is a self-contained thing and it can take just as much effort to sell one product as it does to sell ten products. However, people who sell services have a greater challenge because there is a time factor involved. If they “invest” their time in working, it delivers a return. If they “spend” their time frivolously on non-essentials, the time is lost.

This year, how will you spend your time? Will you be frugal, wisely investing with an awareness of the financial ramifications?

- Jessica Routier, IAC-EZ

We need to invest in our businesses – the saying is true: “you need to spend money to make money.” However, not all of those expenditures are as necessary as we think they are when we first make them. Perhaps you bought a pony because you thought it would be the perfect addition to your business. After all, who doesn’t want a pony? But now it’s time to sit down and think about your expenses through the year. Look at everything – including the pony – and decide whether it is truly earning its keep.

There are things you can do:

• Perhaps you can find a way to make money off of your purchase, which you hadn’t acted on or thought about before. If you can, great. But you need to put your ideas into action soon before your pony (or whatever the asset is) becomes obsolete.
• Perhaps you can cut your losses and sell your asset now. Yes, you’ll lose some money but it will keep you from losing more money. (A pony has to eat, after all).
• Perhaps the investment is lost altogether. If that’s the case, you’re down some money but consider it an investment into your own education: Think about what the circumstances were that “inspired” you to invest in that purchase in the first place and try to keep it from happening again.

I’ve seen this exact scenario on a number of different investments/assets/purchases: websites and domain names are common; so is computer equipment; so are iPhone applications. Early in my own business, I bought business cards that I just found in a drawer years later, still in their package.

You will inevitably make these purchases in your business from time to time, but reducing them (or recovering your investment once you’ve made it) will need to be an annual habit you’ll want to get into.

Jessica Routier, IAC-EZ