Tuesday, February 23, 2010

Should I buy or lease equipment for my business?

Ready to invest in some new equipment for your small business, but concerned about the added burden of a loan? Consider leasing.

Not only does leasing help you conserve your cash, it also ensures that you don’t wind up paying for equipment that quickly becomes obsolete or unsuited for your needs. And if you need the equipment only for a short time or special project, leasing saves you the hassle of having to be both buyer and seller.

There’s no limit to the type of equipment available for leasing, or the size of the company that can access it. Even one-person operations can lease equipment. Unlike loans, leases generally do not require a down payment. You’re required to finance only the value of the equipment expected to be used during the lease term. Depending on the type of equipment and lease arrangement, you may also be responsible for routine maintenance and other costs as well. When the lease expires, the equipment goes back to the leasing company, completing your obligation.

Leases are not loans, so their costs are calculated differently. Payments on an operating lease are considered an overhead expense that you can deduct from your business income. Generally, however, the cost of leasing is similar to the cost of other financing options when you consider the entire transaction.

Flexibility is another leasing hallmark. You can tailor a lease to fit your month-to-month, seasonal or annual cash flow needs. And if customers or the competition demand that you always have the latest technology, a short-term lease can help you get what you need and keep your cash. Most leasing companies offer lease-to-own plans if you determine that purchasing the equipment is in your best interests of your business.

The Equipment Leasing and Financing Association (ELFA), a trade group of leasing companies and financial services companies, has a special section that explains the basics of leasing at its Web site, www.elfaonline.org. You’ll also find guidance on leasing options and benefits, loan/lease differences, leasing terminology, and a searchable directory to help find a leasing company to meet your needs.

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, February 9, 2010

How do I keep my employees motivated?

One of the first and most important lessons an entrepreneur learns is that employees really are a small business’s most important resource. In fact, the business literally cannot succeed with out them. Their talent, skills, and effort truly add value to your products or services, allowing you to focus on the planning and creative issues that will move your business forward.

Unlike your equipment, computers, and other resources, however, you can’t simply turn employees on and off for business hours. All employees need a clear understanding of their role in your business and how it can grow, plus the motivation to achieve and, even better, exceed those expectations. That’s why you, as the business owner, also hold the title of “Chief Communicator and Motivator.”

It’s important to have direct contact to make your message clear. Some owners try to save time and manage by email. That works only to a point. But direct contact builds trust and rapport.

Establish your business “mantra” and keep repeating it. Don’t assume that everyone involved in the business understands and buys into the mission as you do. After all, you’re the one who created it, not them. They haven’t lived and breathed every detail as you have.

Here’s one simple step to make certain you communicate clearly. Instead of asking if an employee understood your instructions, ask what specific steps the person will take to complete the task. That way you can be absolutely certain they not only understood, but also plan to complete the assignment in an appropriate way.

Avoid constantly criticizing employees. That hurts morale and can make people less motivated. If you highlight the positive and correct mistakes without getting personal, employees are more likely to deliver what you want.

While a good manager is also visible, it’s important to not make it appear that you are micromanaging. A quick chat about work and non-work issues during a stroll through your business is all the positive reinforcement is all most employees need. They’ll feel more comfortable about coming to you with questions, concerns, or suggestions. Augment the informality with individual and group meetings to share information and updates, brainstorm ideas, and simply get to know each other. Such interaction will not only help re-energize your staff, but the boss as well!

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, February 2, 2010

What are the best sales habits to practice to keep my customers?

The longer you’re in business, the more you realize that the only constant is change. You may be enjoying strong sales across a broad customer base, but those conditions could be far different in just a matter of months. A competitor’s offer may tempt your customers to try something different. Organizational and operational changes may require you to build relationships with new people from scratch.

While there are several approaches to these challenges, all share the same fundamental elements—good selling habits. For example, it’s important for your business to approach selling with a positive, service-minded attitude that focuses on your customer’s needs, desires and expectations. How do you get these valuable insights? Ask them. Most people love to talk about themselves, and what you learn will help you adjust your sales and service tactics accordingly.

Keeping the attention on them, rather than you, will also help you tune in to why they buy, or why they don’t. Plus, if you take time to listen and ask questions, customers will start to think of you and your business as a valued resource, rather than just a selling machine. You can easily show that you are willing to help the customer by anticipating what they need and having answers to potential objections.

Train yourself and your employees to smile. It’s easy to get grumpy or cynical if sales go south. But that’s when a good attitude becomes most important. Don’t be afraid to take a risk or try out a new approach from time to time. It could be a new marketing pitch or advertising channel. When operating a business in today’s competitive world, the greater risk is in thinking that the status quo will suffice.

Remember too that today’s customers have higher expectations than ever before. You can’t accommodate everybody’s needs, but automatically declining an unusual request will get you nowhere. By adopting a positive, can-do attitude, your mind will instinctively be alert to ways for doing things that once might have seemed unreasonable. That will ensure your customers keep coming back and, just as important, keep recommending you to others.

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties