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September 1, 2010

Tax Rules You Should Know About for 2011

Filed under: General — Tags: , , , — afp @ 1:43 pm

accountant-istock

I read an article recently regarding tax rules for 2011 and I wanted to share as I think they could affect all of us.  The full article can be found at http://bit.ly/d7vCIO.  There are also significant tax changes set to take place regarding leases and once those are detailed I will inform everyone of those changes. 

There is an enormous amount of uncertainty about federal taxes for 2010 and 2011. Will proposed tax cuts, such as 50 percent bonus depreciation on equipment purchases, an extension of the research credit, and an increase in the deduction for startup costs for small businesses be enacted this year? Will the Bush tax cuts expire at the end of 2010, pushing personal tax rates for ordinary income and capital gains considerably higher in 2011 and eliminating special treatment for dividends? Amid this uncertainty, there are some new rules that will take effect in 2011 and they may impact your actions for this year.

Changes in medical reimbursement plans

If your company maintains a flexible spending account (FSA), health reimbursement account (HRA), or health savings account (HSA), new rules take effect in 2011. Starting next year, these plans will no longer be able to reimburse over-the-counter medications on a tax-free basis. The only exception: doctor-prescribed over-the-counter medications, such as for Clariton and Prilosec, can continue to be reimbursed tax free.

What to do now: You’ll need to officially revise the terms of your plan and communicate the new terms to employees. Starting next year, the penalty on non-medical reimbursements from HSAs to those who are under age 65 doubles to 20 percent; currently it’s 10 percent.

Advise employees who have these accounts to maximize their withdrawals for over-the-counter medications this year and avoid penalties next year. Reimbursable items are listed in IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.

Reporting of credit card transactions

For tax years beginning after 2010, payment processors and third-party settlement organizations, including PayPal, are required to report to the IRS all credit card and similar transactions of payments to merchants on the new Form 1099-K, Merchant Card and Third Party Payments. There is an exemption from reporting for merchants who have 200 or fewer transactions, or proceeds of $20,000 or less for the year (the “de minimis rule”).

What to do now: Review your record-keeping practices to make sure your information on income receipts will square with the information being reported about your credit card transactions to the IRS. Also be prepared to see an increase in banking fees, if you have not already received one, because it is likely that banks will increase their fees to cover this administrative chore.

Grants for wellness programs

The federal government will make tax-free grants to small businesses that set up Comprehensive Workplace Wellness Programs; $200 million of federal funds has been appropriated for this purpose. The wellness programs can focus on certain aims such as smoking cessation, physical fitness, nutrition, and stress management. The grants run for up to five years. Funds will be appropriated for five years beginning in the government’s fiscal year 2011, which starts October 1, 2010. The grants apply to companies that did not have a wellness program prior to March 23, 2010, and that have fewer than 100 employees who work 25 hours or more per week. The grants will be made by the Department of Health and Human Services.

What to do now: As yet, no application rules have been created for these wellness programs. If you do not yet have a wellness program but may set one up if you can receive financial assistance, then continue to check HealthCare.gov for details. (There’s nothing there yet, but hopefully there will be soon).

W-2 reporting

Employers are required to report on employee W-2 forms the value of health insurance, starting with W-2 forms for 2011. Reporting is required whether premiums are paid by the employer, employee, or a combination of both.

What to do now: Make sure that you track health care premiums for the year. If you use a payroll service, this likely will be done for you, but be sure to ask just in case.

Cafeteria plans

Cafeteria plans are employee benefit plans that let participants choose from a menu of benefits or cash. Plans cannot discriminate in favor of “highly compensated employees” (e.g., owners or management); complex testing rules are used to determine whether plans are discriminatory. Starting next year, small businesses (those with no more than 100 employees) can set up Simple Cafeteria Plans under which plans are automatically treated as nondiscriminatory (no testing is necessary).

To be a Simple Cafeteria Plan, an employer must make certain contributions:

  • A uniform percentage of compensation (but not less than 2 percent), or
  • The lesser of (a) at least 6 percent of compensation or (b) twice the contributions that employees make from their wages on a pre-tax basis.

Note: Despite the changes in the nondiscrimination rule, sole proprietors, members of limited liability companies and partners in a partnership, and more-than-2 percent S corporations shareholders are still barred from participating in a cafeteria plan.

What to do now: Watch for IRS guidance on these plans; as yet, no guidelines have been issued. Meet with a benefits expert to determine whether these plans make sense for your company. If you don’t yet have a plan you may want to set one up, and if you already have a cafeteria plan, you may want to adapt it to Simple Cafeteria Plan rules. If a company adopts a Simple Cafeteria Plan for 2011, be sure to factor into the company’s 2011 budget the cost of employer contributions.

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August 24, 2010

The Power of Asking Questions in Your Sales Process

Filed under: Sales Tips — Tags: , , , , , , — afp @ 3:19 pm

question

One of my favorite sales trainers wrote an article about selling that I found interesting.  I’ve changed some of the information to relate to all industries/companies and wanted to share these thoughts.

When college coaches recruit high school athletes, they don’t waste time listing all the fine features of their university, why? Because students are only interested in what they’re interested in. They are not necessarily interested in what the coach likes about the school.

The same thinking applies to your customers. Some sales people dive right into a presentation. They “dump” all the information they can about their company and their programs, and they think they are selling.

Telling is not selling. Selling is not a one-size-fit’s-all process. Every customer’s needs, challenges, problems, budget and decision-making process is unique. Therefore, every sale must be designed and customized to fit your customer’s individual needs.

There is only one way to find out what those needs are, and that is by asking questions. Questions are a salesperson’s most valuable selling tool.   Most sales people know that in order to make a sale that they have to show the benefits to the customer.  But a benefit to one customer may be of no interest to another.  The only way to find out which benefits are important to a particular customer is to ask questions.

We have all ran into the “talkative salesperson.”  We usually remember because we found them annoying or a nuisance.  Today’s customers are more informed than ever, gone are the days when the salesperson has to take the “never-stop-talking” sales approach. 

So how do you start a relationship with a prospective customer?  You engage in dialogue up front.  You ask them questions that get them to open up and tell you what is most important to them with this transaction.  The more the customer talks, the better.  When the prospective customer talks they’re revealing clues about themselves and about their business.

There is a process to this.  The first step is to do your homework.  Find out as much as you can about the customer, their business and what their needs are.  Then start asking questions.  The more the customer talks, the better.  When you are listening, you are learning.  When the prospect talks they’re revealing clues about themselves and about their business.  Make sure you listen to the answers, take notes, really listen to understand, resist the tendancy to jump in and present your services right away.  Instead, question more.  Use instructional statements such as “Tell me more,” “Please go on,”  “Elaborate on that for me please,” or “I’d like to know more about that, please continue.”

Remember not to just fire these questions away at the prospect, think of yourself as a concerned friend, someone who is there to help them uncover their needs before you try to fill them.

Once you understand their situation, and present the options, questions are the way to firm up their level of commitment. Ask: “When specifically do you see yourself moving forward?” or  “What is going to happen next on your end? When?”

Questioning and listening are the foundations for your sales success. Increase your questions and you’ll increase your sales.

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August 18, 2010

Being a better listener

Filed under: General — Tags: , , , — afp @ 3:52 pm

active-listening

“Most of the successful people I’ve known are the ones who do more listening than talking.” –Bernard M. Baruch

Being a good listener is something I’ve tried to improve on for years.  If you’ve ever been interrupted by someone while your were talking, you understand the importance of not only being a good listener but talking to a good listener as well.  I’ve read countless tips on how to help myself be a better listener.  One of my favorites that I still use today is to put my phone on mute until the person is done talking.  If you work over the phone a lot like I do that one helps tremendously.  When I’m talking to someone in person or conducting an interview, I also like to put the tip of my finger on the tip of my pen and I can’t remove my finger until the other person has stopped talking.  I know I can not talk anytime my finger is on the tip of that pen. 

I’m a Dale Carnegie follower and enjoy reading the information he sends out.  He sent a tip last week about being a good listener and I wanted to share with everyone as this is an area that affects all of us in business and personal life.

Think of LADDER to be a good listener

  • Look at the other person.
  • Ask questions.
  • Don’t interrupt.
  • Don’t change the subject.
  • Express emotion with control.
  • Respond appropriately.

Here are a few other tips I’ve accumulated over the years that I also find helpful:

  • Active listening.  Without interrupting the speaker, show them you are listening to them by adopting a listener’s pose: eyes fixed on the speaker, occasional nodding or smiling in response, facing toward the person, arms relaxed, no fidgeting or looking at your watch, phone or the clock.  You can also say things like yes, true, that makes sense, etc.
  • If you are attending a speaker, turn off your cell phone!!  If you are required to have it on for business use, put it on vibrate and walk out of the room before answering.
  • Be patient.  Avoid the temptation to finish other people’s sentences for them.   Give them a chance to say what they mean, even if they stutter, pause, or  change verbal gears.

Please share your tips with us by sending them to carrie@financewithafp.com.   

“To listen well, is as powerful a means of influence as to talk well, and is as essential to all true conversation.” –Chinese Proverb

 

August 10, 2010

Tax Cuts Expiring in 2011

Filed under: Leasing tips — Tags: , , , — afp @ 8:34 am

paying money

The IRC Section 179 deduction was increased back in 2008 allowing small businesses to immediately expense the full purchase price of qualifying equipment.  The reason for the increase was to give small business owners tax breaks allowing them to afford to add equipment to their businesses and helping us boost the economy.  Historical Section 179 deductions are:

$250,000 in 2010
$250,000 in 2009
$250,000 in 2008 (was originally set at $128,000)
$125,000 in 2007
$108,000 in 2006
$105,000 in 2005
$102,000 in 2004
$100,000 in 2003
$24,000 in 2002

The bump in the Section 179 deduction for 2008 was suppose to be for one year but was kept at $250,000 for 2009 and 2010 to continue and try to stimulate the economy.  In 2010, the Section 179 deduction was set to go down to $135,000 and at the last minute was increased back to $250,000.  2011 is set to go down again, to $125,000, so we will see if that deduction is allowed to drop so heavily or if a new law will keep it where it is.  Although I hear from many that they feel the economy is starting to take a turn, losing the small business Section 179 deduction could take a detrimental effect.   It would be a mistake to allow this to drop back down to $125,000. 

There are other tax cuts that are set to expire in 2011 also, the below article gives examples of them.

http://www.openforum.com/idea-hub/topics/innovation/article/small-business-tax-provisions-expiring-in-2011-may-squeeze-entrepreneurs-anita-campbell

On top of these tax cuts possibly going away, there are also new laws being worked through that could make it very difficult for a business to qualify a lease as an operating lease which allows the business to expense the monthly payments saving them money in taxes.  Leaders in the leasing industry have worked diligently to try and turn these around.  As new developments arise on all of these subjects, I will post them on our blog.  Until we know what will happen in 2011, I would advise business owners to get the equipment they need before the end of the year to make sure they get the higher deductions and write-offs. 

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August 3, 2010

Interest rate differences on leases versus mortgages

Filed under: Leasing tips — Tags: , , , , , , , , , , — afp @ 10:08 am

interestrate

Customers who are new to leasing are often surprised at the interest rates on leases.  Many people think interest rates for leases are going to be similar to home mortgages.  I wanted to take some time to explain the difference in the two and explain how a lease rate is calculated and why it will be higher than your home mortgage rate. 

First, let me explain how a lease rate is calculated.  There are several components that go into setting a lease rate factor and most of today’s increases in rates are tied to the entire lending and economic condition of our country.   

  • Cost of Funds- This is the interest rate the leasing company borrows its money at.  Leasing companies and banks can get their rates from a number of places, but many will tie their rates to LIBOR or SWAP rates.  If the bank the leasing company is borrowing funds from is in trouble, it may have a higher borrowing rate which then is passed along to the leasing customer.
  • Deal Size- The dollar size of the lease will affect the lease factor rate.  The higher the dollar amount of the lease, the lower the borrowing rate is.
  • Credit Strength- How financially strong is your company?  What is your personal credit score?  How long have you been in business?  What is your paydex score on your D&B business report?  Have you paid other leases on time?  All of your business and personal credit attributes will be considered when a leasing company gives you their approval terms and rates.
  • Lease Term- Most leases range from 24-60 months.  Leasing companies will charge a higher rate the longer the term.   If you would examine portfolio performance for a leasing company you would see that the shorter terms have better performance.  Because of this a leasing company will charge a higher rate on longer terms simply because they are riskier leases to write.  Leases under 24 months will have a higher interest rate as well.  The leasing company has less time to earn interest and make their margin so they have to increase the interest rate to make sure they make enough in that 12-18 month period to meet the margins they need to hit.
  • Equipment- Many banks will restrict certain types of equipment or offer a shorter lease term because they either don’t understand the equipment/market, they’ve had bad performance on that asset type in the past, or because there is a flood of repossessed and off-lease equipment already in the market due to business failures (this makes it more difficult for them to resell that unit if they get it back at the end of the lease or if they repossess it themselves).  Some banks will charge more for what they consider high-risk assets.
  • Residual- Some leasing companies will take residual risk on specific types of equipment; meaning at the end of the term, they will have a 10% or 20% balloon payment versus a $1.00 buy out.  The higher the residual the leasing company is willing to allow, the lower the lease rate and payment will be.
  • Depreciation- Will the leasing company depreciate the equipment?  If not, you will pay a higher lease rate than with a lessor who can utilize the depreciation.

The biggest reason for increased leasing rates in the current market is because leasing companies and banks are much more conservative than they were in the “hay days” of leasing.  Two years ago a company could qualify for the best rates with a 650 credit score and 2 years time in business.  In today’s market if you are not a 700 credit score minimum (usually 725 or higher) and have over 5 years time in business, you will not qualify for the best rates out there.  Many companies and individuals have struggled with these changes.  What they used to qualify for, they no longer do, even if they are paying their previous leases on time.  I do not see things changing in the near future, so if you are a business owner make sure you keep your credit healthy.  For tips on increasing your credit score, read our Blog from January 7, 2010 titled “A Good Credit Score Isn’t What It Used To Be.”  http://financewithafp.com/blog/?p=167.  We have several other blogs about personal and business credit, so take some time to scan through all of them. 

Leasing rates will always be higher than home loans for a number of reasons, first is the asset.  A home will usually appreciate so it is considered a quality asset.  Most equipment written on leases will depreciate and many equipment types have no outside marketable value once the lease is funded.  This makes a lease higher risk and thus requires a higher rate of interest.  Secondly, a home mortgage is a higher dollar amount than most leases funded by small business owners.  Based on deal size alone, a home mortgage will have a lower rate of interest.  Last, a home mortgage will usually ask for more money down so there is more security.  An equipment lease typically asks for only 2 payments in advance making it a higher risk.  There are other factors that play into this, but these three are the main ones I wanted to touch on.

Although leasing rates are higher than home mortgage rates, leasing provides several benefits to a business such as allowing a business to conserve their working capital, preserve their credit lines, take advantage of off-balance sheet financing and receive tax advantages.  80% of all businesses in the United States lease equipment and 30% of all assets acquired are written on a lease. 

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July 27, 2010

Small Business Loans from Wal-Mart?

Filed under: Other finance programs — Tags: , , , — afp @ 10:32 pm

31-shopping_list

Shopping list:

Eggs- check

Milk- check

Bread- check

Small Business Loan- wait… what?

Are you a small business owner in need of capital?  If so, a Sam’s Club membership could open up access to it.  The warehouse shopping centers, a division of Wal-Mart Stores Inc, recently announced plans to test a small-business loan program in partnership with Superior Financial Group LLC.  Superior is one of just 13 federally licensed non-bank lenders approved to make SBA-guaranteed loans.  The program is great especially for small businesses who are getting declined at their local banks and having lines of credits pulled from them.  We have access to this program and have  been able to help several customers get the working capital they need for their business to increase inventory, expand their business or just meet operating expenses.  This program has a long amortized term of 10 years so it is affordable on cash flow and can be paid off early at any point.  This is certainly a fantastic program but the real question I have is how do small-businesses feel about Sam’s Club offering financing?  Wal-Mart/Sam’s Club is well known as a company who has been known to squash small business, driving mom and pop shops out of business due to their low prices that no one can compete with.  It will be interesting to see if businesses are in such dire need of capital that they turn to their “enemy” for financing.  I would be interested to hear from some of the small business owners out there about whether or not they would use Sam’s Club for working capital loans.  Send your thoughts to us!

Call us at 877-237-7287 for more details on this working capital loan program.

July 22, 2010

Persistence Separates Success From Failure

Filed under: General — Tags: , , , — afp @ 4:50 pm

Persistence-2

Persistence… most of the time it seems its easier said than done.  How do we embrace persistence in difficult times?  How do we still stay on the path when it all seems blurred or things don´t seem to be going as planned?

Its focusing on our desired dream or goal that helps us embrace persistence in difficult times.  It is reminding ourselves of the great reward that is to meet us at the end of the journey.  The more we can envision our desired dream or goal, the more challenges begin to appear small as opposed to being obstacles.  It is the challenges we face that make the journey of achieving a dream or goal worthwhile.  Its overcoming the challenges that strengthens us and gives us a strong sense of accomplishment.  True greatness comes from being able to stand up when we fall and continue walking.  Its usually when things get very difficult that we are actually close to achieving success .

As Calvin Coolidge said. “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On’ has solved and always will solve the problems of the human race.”

Our business has recently shown a huge influx of activity which tells me the growing stages of our economy are ahead of us.  We should all pat ourselves on the back for making it through the worst recession we have ever seen.  But let’s not forget to keep that persistence and continue to look at our goals.   It is time to grow and rebuild and we all need to keep that same persistence that kept us going over the tough times. 

I’m going to end with a success distinction from one of my favorite books, “101 Distinctions between Success and Failure” by Keith Cameron Smith and Doug Hanson.

Success if persistence.

Failure is giving up.

Persistence is one of the keys to success and there is no substitute for it.  If you know where you want to go and you don’t give up, you will eventually get there.  Giving up is not an option if you are committed to fulfilling your dreams.  Those who give up, show that they weren’t really committed in the first place. 

Most people will persist until the going gets tough, then they give up.  A few people will keep on keeping on until they reach their goals and these are the people who become successful.  There is truth in the old saying “Tough times don’t last but tough people do.”  Being persistence is being tough.  It means you are committed to doing whatever it takes to be successful.  Don’t settle for less.  That’s called giving up, and you will feel like a failure when you do.  Become a “whatever it takes” person and you will succeed. 

Success is persistence.

July 13, 2010

The Fun of Creating Your Company Name

Filed under: General — Tags: , — afp @ 8:48 am

companynames

Creating a name for a company is one of the fundamental elements to starting a business.  You want to make sure people will remember the name of your company by either making it unique or making sure it explains what you do.  I read an article recently telling how some of the most widely known companies in the World created their names and the stories behind them.  I found it interesting and wanted to share.   The full article can be found at http://bit.ly/bLOPqd. 

1. Google

The name started as a joke about the amount of information the search engine could search, or a “Googol” of information. (A googol is the number 1 followed by 100 zeros.) When founders Larry Page and Sergey Brin gave a presentation to an angel investor, they received a check made out to “Google.”

2. Hotmail

Sabeer Bhatia and Jack Smith had the idea of checking their email via a web interface, and tried to find a name that ended in “mail.” They finally settled on hotmail because it had the letters “html,” referencing the HTML programming language used to help create the product.

3. Volkswagen

Volkswagen literally means “people’s car.” Adolf Hitler initially came up with the idea for “cars for the masses,” which would be a state-sponsored “Volkswagen” program. Hitler wanted to create a more affordable car that was able to transport two adults and three children at speeds of 62 mph. He choose the car manufacturer Porsche to carry out the project, and the rest, as they say, is history.

4. Yahoo

The word “yahoo” was coined by Jonathan Swift in the the book Gulliver’s Travels. The term represented a repulsive, filthy creatures that resembled humans (think: Neanderthal). Yahoo! founders Jerry Yang and David Filo considered themselves yahoos, and thought the term would be appropriate for their joint venture.

5. Asus

The consumer electronic company is named after Pegasus, the winged horse of Greek mythology. The founders dropped the first three letters for the high position in alphabetical listings. In 1998 Asus created a spinoff company named Pegatron, using the other unused letters of Pegasus.

6. Cisco

Contrary to popular belief and theories, Cisco is simply short for San Francisco. Their logo resembles the suspension cables found on the Golden Gate bridge.

7. Canon

When Canon was founded in 1933 under the name Precision Optical Instruments Laboratory. Two years later they adopted “Canon” after the company’s first camera, the Kwanon. Kwanon is the Japanese name of the Buddhist bodhisattva of mercy.

8. Coca-Cola

Coca-Cola’s name comes from the the coca leaves and kola nuts used as flavoring in the soft drink. Eventually Coca-Cola creator John S. Pemberton changed the ‘K’ of kola to ‘C’ to create a more fluid name.

9. FranklinCovey

The planning product line was named after Benjamin Franklin and Stephen Covey. The company was formed in 1997 from the combining of the two companies FranklinQuest and the Covey Leadership Center.

10. IKEA

IKEA is simply a random collection of letters, based from the first letters of founder Ingvar Kamprad’s name in addition to the first letters of the names of the Swedish property and the village in which he grew up: Ingvar Kamprad Elmtaryd Agunnaryd.

11. Lego

Lego is a combination of the Danish phrase “leg godt,” which translates to “play well.” Initially the company built wooden toys, and later switched to making plastic bricks. Lego also means “I put together” in Latin, but the Lego Group claims this merely coincidence and the origin of the word is strictly Danish.

12. Reebok

Reebok is simply an alternate spelling of “rhebok,” an African antelope. The company founders found the word in a South African edition of a dictionary won by the Joe Foster, son of the Reebok founder J.W. Foster.

13. Sharp

The Japanese consumer electronics company is named after its first product, an ever-sharp pencil that was created in 1915.

14. Six Apart

Six Apart’s name has one of the most interesting origins. The web company’s co-founders Ben and Mena Trott were born six days apart.

15. Skype

The original prototype of the company’s flagship product had the name “Sky-Peer-to-Peer,” which was shrunk down to Skyper, then finally Skype.

16. Verizon

Verizon is a combination of the words veritas, which is Latin for “truth,” and horizon.

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July 6, 2010

Benefits of Leasing… Leasing 101

Filed under: Leasing tips — Tags: , , , , , , — afp @ 8:52 am

cash flow

I am asked on a consistent basis by customers what the benefits of leasing are and how leasing differs from a loan with their bank.  There are many differences and it is important to understand them before deciding what payment/finance option is the best for your company when looking to acquire equipment.  Here are some of the main benefits to equipment leasing:

Conservation of Working Capital:

With an equipment lease, you get 100% financing so the amount of cash needed up-front is reduced. Even if you have the cash to purchase your equipment it may not always be the best choice. With equipment leasing, cash can be used for other business uses such as expanding sales, new marketing programs, quantity discounts, increasing inventories, opening a new line of business, or simply cash reserves.

If you decide not to lease, you will have to come up with the entire amount for a cash purchase OR a sizeable down payment as well as higher payments for traditional financing.

Preservation of Credit Lines:

A lease preserves bank lines of credit for working capital, seasonal requirements, other appreciating investment opportunities, or emergencies. Equipment leasing is like opening an additional line of credit.

Better Terms and Structure than Banks:

Most bank loans require larger down payments, compensating balances, additional collateral, or restrictive covenants. They may not be as flexible in their payment schedules and may tie the financing to a floating interest rate. Equipment leasing has fixed payments, flexible schedules, low down payment, and does not require extra collateral.

Off-Balance Sheet Financing:

Larger companies often have a need to maintain certain debt-to-equity ratios or comply with debt covenants. Operating leases do not show on the balance sheet as liabilities and the equipment is not counted as an asset, thereby keeping the ratios unaffected.

Tax Advantages:

Operating leases are generally treated as fully deductible direct operating expenses, which means a lower taxable income. In addition, equipment leasing can be a tool to avoid certain negative impact of the Alternative Minimum Tax. Your tax professional should be consulted to determine what percentage of other types of leases could be deducted.

Leasing Provides Sales/Use Tax Deferral:

With a purchase, sales tax must be paid in full at the time of purchase. With (most types of) equipment leasing sales/use tax is paid over time as the equipment is used (except in Illinois, Maine, New Jersey, and the District of Columbia). This can result in substantial cash savings in the first year of the lease.

Hedge Against Inflation:

With the lower, fixed-rate payments of an equipment lease, you’re protected against inflation. With equipment leasing, cash outlays are deferred as compared to an upfront purchase. Inflation will then lessen the cost of future lease payments, since the payments will be made with “cheaper” dollars. You will be making your monthly payments to the leasing company with ever-inflating dollars during the term of the lease. This actually reduces the cost of financing to you in real dollars, which is an advantage that is often overlooked.

Maintains Owner’s Equity:

Many companies in a growth phase sell stock to raise money for expansion. A well-conceived lease program can allow a company to grow while minimizing the need for equity financing.

Facilitates budgeting:

Equipment leasing simplifies accounting procedures and eliminates depreciation scheduling. A fixed lease cost ensures consistent control over equipment expenditure.

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June 30, 2010

How Fit is your customer service department?

Filed under: General — Tags: , , — afp @ 8:16 am

three_fit_people

Have you ever considered the fitness level of your customer service department?  I’m not talking about how many push-ups or sit-ups they can do.  I’m asking if the customer service your team is providing is running at full speed.  If you haven’t given this much thought, you might not be seeing the big picture issues that could be hurting your business.  There are many components in developing a fitness program to help an individual hit their peak performance.  Your customer service department also has many components that need to be maintained to make sure you are giving the best customer service you can.  The skills your customer service department needs may vary a little from business to business but I’m going to bring out a couple of main skills that are necessary for your customer service team to reach an optimal level of customer service.  Here are some of the questions you can ask to see if you are succeeding or where improvements need to be made:

How Do They Sound?

This is actually far more important than what you may think. The voices of your customer service representatives are often the first impression that a customer receives from your company. Are they positive, professional, and upbeat, or do they sound bored and disinterested?  At one of the first companies I worked for, we had small mirrors on our desks that read, “Can Your Smile Be Heard?”  It was a great reminder that the sound of your voice makes a big impression on your customer. Make some calls and find out for yourself how your team rates. If you’re hearing less than ideal voices on the line, guess what? Your customers are, too!

What Do They Say?

Does your team have the necessary training, keywords, or call guide so that they’re prepared and know what to say? If not, you’re making it more difficult for your team and creating an environment where miscommunication is likely to occur. You don’t want your customer service team giving mixed messages to customers as it will lower your credibility and cause you to lose customers.  Take the time to provide them with the words to guide them through their phone calls. No, they don’t need to recite a script, but an outline or suggestions of what to say will go a long way to making your customer service consistent and clear.

What is Their Attitude?

Are your customer service reps happy with their job and with your company?  Do you offer incentives and recognition for jobs well done?  If not, I would recommend making some changes.  Employee dissatisfaction can dramatically affect a company’s customer service and ultimately its bottom line. If your team feels underappreciated or negative, your customers will know.  Whether they communicate this directly or indirectly, a negative attitude of an unhappy worker can not be masked. 

Is Their Workspace Pleasant?

Is your customer service team in a nice area?  Do they have comfortable desks, sunlight and good lighting?  Or do you have them shoved into a dark corner?  It always amazes me when companies choose the worst location for their customer service team.  These are the individuals who are on the front-line talking to customers on a daily basis.  It is important to make sure they are happy in their work environment!  If you need to make some changes, get your team involved and ask them for tips in enhancing their working environment. 

Are You Hiring the Right People for the Job?

Who you hire can make all of the difference. A good customer service rep should give each customer a warm greeting, not allow prejudices to influence their quality of service, be a good listener and always keep the conversation on a professional level.  You may have other important traits for your company but just make sure your reps mesh well with the company’s image and philosophy. 

Are You Keeping Them Fresh and Updated?

Training your customer service team and all employees in general should not be limited to when they are first hired.  Enhancing your employees skills throughout their career with your company is important and makes sure your team is knowledgeable and up to date on everything they need to know. 

Are They Cross-Selling and Up-Selling?

Your customer service department should be an extension of your sales team.  They may be the only people talking to your current customer base outside of the sales team.  Can you find ways for them to increase your ROI?  In one of my former companies, we would ask the customer if there was any financing or leasing we could help them with each time they called into customer service.  Even if the sales person had talked to them 3 weeks ago sometimes we would just catch that customer at the right time.  Give your customer service team the ability to cross-sell and up-sell and then give them incentives for making any additional sales.  You will see your sales and bottom line increase.

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