Managing cashflow: get more bang for your startup buck

A common error for fledgling businesses is to get bogged down by branding and marketing costs, says James Caan

 

It may be difficult to see where your money would be best placed at the startup phase. 

 

Getting the finance to start your business is often seen as the biggest obstacle to starting up. But what is even more significant than accessing those initial funds is how to make your money go a long way. Sometimes it is difficult to see where your money will be best utilised, particularly at the start-up phase of any business. This is all the more important when you are invariably bootstrapping, putting some of your personal savings towards your venture to keep your business developing. So how can you get your money to make you money?

In the first six months of 2013, the UK's startup activity was up by 3.4% on 2012, with more than 90,000 new ventures. With this rate of business creation in the UK, it is inevitable that many will fail. To avoid this, you need to steer clear of making big financial mistakes, because there is nothing worse than your business losing more money than is necessary. As I have always said, if you're going to fail, you should do it quickly. Failure can be a great lesson, but it should not destabilise any future ideas from coming into fruition because the financial cut is so deep.

Today 49% of small business owners say they started up with less than £2,000, a seemingly astonishing feat. But there are clear ways you can avoid extra costs. A big one is not hiring until you are ready, employees are one of the biggest costs in any new business. That being said, there is no doubt that they will be the ones who in the future can drive your business forward, but you must be able to justify new hires, especially at the early stages of a business. Bringing on board people you do not greatly require is an expensive problem, so you may want to consider hiring part-time support or sub-contractors, depending on the demands of your startup. And although admin work can be exhausting, juggling it along with other aspects of the business can help to make you a more dynamic entrepreneur and help round your skillset.

Do not underestimate the time it takes to set up. Starting a business will always take up more time than you will have imagined, and cost more than you would like it to. For these reasons you have to be flexible, and should not drain your resources too soon. With human error, slow vendors, changes to technology and extenuating circumstances – both personal and professional – not everything will go perfectly to plan. This is why you must be more tactful and cautious with spending, so that when you have to compromise on timing, you have a cushion of support.

A common error for startups is to get bogged down in branding and marketing costs. It is unbelievable just how much you can promote your business at little cost. Social media platforms such as Twitter, Instagram and Facebook are brilliant ways to engage potential customers, and SEO is a valuable and free content-based tool to get your business noticed. Of course, the cost of your time is valuable, but spending money on expensive branding companies can harm your resources, particularly as a new venture when your direction is evolving and most susceptible to change. Wait until you have been trading for at least six months before heavily investing in the branding side of your business. You will be in a much better position if you do.

Start-Up Loan recipient Karine Bono, a young fashion designer from London, understands the difficulty of starting up on a budget. With her £5,000 loan, Karine minimised expenses by producing all her garments and designs at her home studio in Hackney. By trading her clothes on Etsy, a popular clothing site, Karine is gaining exposure without breaking the bank, not spending too much on marketing but still benefitting from an online presence.

It is undeniable that new businesses have to find a way to manage their costs if they have any chance of survival. This is why the first sale is so important, and creating a profitable business is key. At the start be frugal and push yourself so you don't have to push others. After all, taking on challenges is what being an entrepreneur is all about.

James Caan is chairman of the Start-Up Loans Company. Each fortnight he tackles a different business issue for the Guardian Small Business Network. 

Why Every Entrepreneur Should Have a Mentor

"Being an entrepreneur isn't an easy job," says Andres Teran, cofounder of Toplist, a social shopping recommendation startup. "There are moments that you have nothing and feel like things are never going to getting better."

Teran is referring to the days before his company's vital pivot point, when he and his team had dedicated their lives to creating a site they loved with features they themselves would want.

"Toplist, before being an app, was a website where people shuffled around cool products curated by their own interests," says Teran. "We worked hard to develop this cool site with great features that showed amazing products. After we launched the site, though, we noticed people didn't use all the great features we had built for them. They weren't engaging with the amazing content we had curated for them. Worst of all, they weren't coming back to use our service."

At that point, his team set out to raise capital for what they had built, hoping to secure enough money for marketing, hires and anything else it might take to help the concept catch on. But, with low user numbers, the Internet odds were stacked against them and time was running out. No one fronted the cash. 

"We were just about to let everything go and end the project when we landed a meeting with the CEO of a micro-credit company that had just gone public in Mexico to see if he wanted to be involved as an angel investor in our company," says Teran. 

It was the only lead they had, and soon, he would become the first investor. But not in the company's current state. First, there were essential pivots to be made, honest realizations to be had and hard-earned advice to be taken. The Toplist team needed an outside perspective and some guidance to find their way.

"On that day, he made us realize two things," says Teran. "One, the product we had been working so hard on did not work for the users; we thought it would, but it didn't. Two, not everything was a complete failure: We had learned a lot about how to build products that people could be engaged with, we learned about working together as a team. We had learned from our mistakes actually."

What was supposed to be a pitch meeting turned out to be a crucial pivot point for Toplist — one that wouldn't have happened without the right guidance and advice. Teran's team took the feedback seriously, made the necessary changes and their luck started to change. The company's new and influential mentor had saved just saved them from near failure.

"Before we left his office, he said that if we changed our project into something more attractive he would definitely invest," says Teran. "Sometimes you need someone else to honestly point out what is wrong. We were amazed by his good will. 

He could have just said, 'No,' and we would have gone on with our failure and him with his success. But he took our side.
 
He could have just said, 'No,' and we would have gone on with our failure and him with his success. But he took our side." 

 

Mentorship has been a hot topic in the startup world for years, with incubator and accelerator programs offering it — among other things — in exchange for stock in founders' ideas. Outside of incubators though, finding a good mentor is challenging. But finding the right mentor is a lesson in luck, persistence and not letting opportunities pass you by. 

 

"We did look for mentorship before we found someone that was right," says Teran, explaining that his company's mentor was discovered by chance. "I think the way to go is talk with people that can give you advice on certain topics and, most important of all, help you to make good decisions. 

 

A big thing, though, is not to obsess about finding mentorship, because you could lose focus on what's really important as an entrepreneur — executing the concept," he says. So how do you stumble upon your own honest and willing mentor without losing sight of your first priority (your company)? 

"Good mentors will be hard to track down, and their time is extremely limited," says Brett Hagler, cofounder of Hucksley, a marketplace for discovering one-of-a-kind brands. "Reach out creatively and always try to take the 'backdoor' approach by getting introduced through a mutual contact. Certain platforms such as LinkedIn allow you to have direct access to your targeted mentors. Always be creative on your specific ask and make it as relevant and direct as possible."

 

Look hard for a mentor and network as much as possible, but don't make finding a mentor your primary focus. Perhaps Sheryl Sandberg said it best in Lean In: you don't need a mentor to excel, "Excel and you will get a mentor."

By Tracey Wallace1 day ago

5 Brazen Insights on How to Build a Better Small Business

Photo: Indochino.com

 

When it comes to starting a business, sometimes having a great idea is the easy part. Building a successful business around that idea takes vision, knowledge and sometimes a bit of luck in the form of favorable market conditions.

 

There’s another thing that is often the difference between a successful and unsuccessful business venture: savvy business advice. Whether you hear it from specialists in the field or personal connections with industry knowledge, it’s important to weigh the wise counsel of experienced business minds.

In that spirit, let’s look at five key insights from leading professionals on how to build a better business.

1. Keep your financial house in order.

   When you start a business, it’s not uncommon to wear many hats — often by necessity. One area where it’s easy to make a critical mistake is finance. There’s more to it than making payroll and meeting tax obligations. Not that paying taxes isn’t important. Steve Klitzner of Florida Tax Solvers says, “One of the most important things for small business owners to do is to pay their quarterly taxes on time.”
   
   Klitzner says not doing so “can lead to penalties and cause the business owner to pay more than they already owed on their taxes.” Business owners should also consider that they may miss out on favorable tax deductions simply from lack of experience. While handling your own taxes saves money in the short-term, it may end up being far more costly in the end, if not handled correctly.

2. Protect your brand.

   In business, the health of your brand is almost everything. Be more than a brand caretaker — be an ultra-vigilant brand watchman. This goes for everything from online reputation management to potential trademark infringement. Concerns about infringement cut both ways.
   
   If you accidentally find your company infringing, it could lead to potentially ruinous legal bills. Trademark attorney Josh Gerben recommends business owners perform a top-to-bottom trademark search prior to starting a business. An experienced trademark attorney will ensure your proposed trademark is free for use– and give you peace of mind.
   
   Gerben suggests, “Instead of spending a lot of money to build equity into a brand that may be infringing on someone else’s trademark rights, it is highly recommended that you hire a trademark attorney to do a professional trademark search.”"A trademark search performed by an attorney will help to ensure your trademark is truly clear to be used in the marketplace.” By following Gerben’s advice you can avoid a potential legal minefield — which is the last thing any new business needs.

3. Protect your company with small business insurance.

   Insurance is one of the costliest aspects of running a business; involving paperwork and administration. So many business owners pass on business insurance and hope for the best. Ryan Hanley says entrepreneurs should avoid that approach at all costs. Hanley, author of the Albany Insurance Professional blog, suggests that “skimping on insurance — especially health insurance — is like playing Russian Roulette with your future.”
   
   While bypassing insurance will save money upfront, the incurred costs of unexpected medical care is often catastrophic to a business. If you or your employees aren’t healthy, chances are the business isn’t healthy either. Hanley encourages business owners not to consider insurance a luxury. He says it is best viewed, not in terms of current price, but in terms of future cost.

4. Market your business effectively.

   Even the best managaed small business doesn’t get very far without effective marketing. On the other hand, great marketing can sometimes compensate for other areas where a business is lacking. For businesses without a large marketing budget, it’s sometimes difficult to know where to deploy your resources.
   
   One way to market economically is through an online presence. A well-designed company website is critical for all businesses. Internet marketing strategist Jeff Shjarback says that your company website “is an excellent way to increase sales and generate new leads. A website not only draws people in, but offers you a space to communicate with possible customers, current customers and post content pertaining to your business.”
   
   Once you’ve mastered the basics, optimize online marketing efforts through the savvy use of social media platforms. Building fans through services such as Facebook, Twitter and Instagram helps generate the best kind of awareness — word of mouth. Other techniques such as search engine optimization (SEO) and e-mail marketing can also build your brand and customer base.

5. Plan for future success.

   It’s never wise to enter into any situation without careful consideration of the facts and circumstances. It’s even less wise to enter into business that way. A well thought out business plan is vital for success. It helps you design your business approach and gives you a chance to consider variables that are certain to pop up later. It will also give you a good read on the true feasibility of your business model.
   
   Business plan specialist Dick McCormick believes that startups “don’t have to develop a written business plan to start a business. But a comprehensive, realistic plan will greatly increase your chances of being successful. Would you build a house without a blueprint? Would you drive cross-country without a map?” Starting a business without a well-reasoned plan is a good way to seriously diminish your odds of success. A thorough plan will guide you and make sure your business has the solid foundation it needs to flourish.

Zack Kirchin is the senior author at TheTechFortress, a blog that references the latest technology, gadgets, news and more.

Small Business Comebacks

Juli Oliver got into the business of professional organizing because it matched her high-energy personality. Since she launched her company, OrganizeNY, in 2005, she's had a steady stream of long-term clients. But by the end of 2009, in the depths of the recession, business was dropping fast and so was her morale. By January 2010, business had slowed 80% from the previous year.

"I never slow down or stop," says Oliver, 34. "Not having anything to keep me going was a very strange feeling. It was awful. [But] I knew I couldn't sit inside my home every day and mope around."

For Oliver, finding ways to socialize with other small-business owners was invaluable in changing her attitude, which helped her make a business comeback. Today, her revenues are back to pre-recession levels.
Here are five steps to get in the right mindset for a business turnaround.

When Oliver's business slowed down, she started going to more networking events for women and small business owners, while raising awareness of her business through social networks and daily-deals sites.

"[Business] started to pick up because I kept fighting the recession and I kept promoting myself and getting my name out there," she says.

If you don't have one already, create an advisory board you can consult about business challenges, says Condren.

"Talk to people who have been there and done it and fallen through the same hole," says Mark Parkinson, a Somerset U.K.-based business psychologist and author of Using Psychology in Business (Gower, 1999).

Step 2: Avoid naysayers and watch what you feed your mind.
It's easy to start and end your day watching the news, but beware of the negative messages you're getting from headlines, says Condren. She suggests limiting your news intake to once a day. "You want to stay current and skim the headlines, but stay away from the rest of it," she says.

Read something inspiring instead, ideally just before bed and right when you wake up. "The last thing you put into your mind before you go to sleep is what you are going to focus on," says Condren. She recommends books like the 1937 classic Think and Grow Rich by Napoleon Hill, The War of Art by Steven Pressfield (Warner Books, 2003) and The Luck Factor by Richard Wiseman (Miramax, 2004).

Step 3: Get up and move.
Exercise is one of the first things people skip when under pressure. But when we are feeling stressed our body produces noradrenaline, a stress hormone that can affect our attention and quality of thinking. Exercise spurs endorphins to counter the buildup of stress hormones in the body. "Literally, your brain does work better if you exercise. The quality of your thinking is improved," says Parkinson.

Even if you can't make it to the gym, you can still find small ways to incorporate exercise into your day. Condren suggests taking a few flights of stairs instead of the elevator or simply walking around the block to get your blood pumping and help clear your mind.

Step 4: Keep learning and stay on top of industry trends.
While solving day-to-day problems can be all-consuming, taking the time to learn about new aspects of business is an important way to stay focused on solutions -- not just your problems. Condren suggests starting simple, like reading an article related to an area of business that's been giving you trouble, taking a half-day workshop or attending an industry conference.

If you don't have the time or money to spend at a conference, consider online educational videos. Not only can they get you thinking about your business in new ways, they can help you stay current in your industry. "Instead of watching the news while you're cooking your dinner that evening, listen to a home-study course," Condren says. "You have to stay current, or you will feel left behind."

Step 5: Be your own cheerleader.
Studies have shown we remember uncompleted tasks better than we remember what we've accomplished. But even if you're faced with a never-ending to-do list, Condren says it's important to remember everything you've already accomplished. For example, if a client sends over a complimentary note or you close a major deal, print out the email or document and put it in a file you can turn to when you're feeling discouraged. Also, update your resume, even if no one else sees it, as a reminder of your achievements.

It's tapping back into your passion for the business that will ultimately help turn it around, says Parkinson. "You've got to remember all that positive stuff that got you fired up in the first place," he says. "It's like falling in love. You've got to remember what it's like and then you might want to do it again."

Jane Porter

Jane Porter is an associate editor at Entrepreneur.com in New York City.

Pitching your business to the media? Digital’s the way to go

If you’re a small business trying to figure out how to get your story out there, the digital world we live in offers amazing opportunities. From social media to content creation to the distribution of video segments, the options are more exciting than ever before.

However, if getting mainstream media on board with your brand and its story is your goal, there are a few things to consider.

I was recently interviewed for an article about the last time someone ‘wowed’ me with a media pitch, and what made his or her PR approach ‘unique and memorable.’

Sadly, I had to respond that in my near decade-long news career, not one approach stood out. I recall often cringing at the amount of money spent on fancy folders and press kits that would arrive daily, and usually go straight into the recycling bin.

Why? As a news director and reporter, I was already busy pursuing stories I was working on, so the chances of me looking through a fancy, 20-page document were slim to none. Mostly, none.

If getting your business in front of major media is your goal, the digital era has opened up an entirely new and exciting world for you. Here’s some advice:

The death of the press release

Old-school lingo and traditional format press releases don’t work, unless it’s a slow news day, but that shouldn’t be your intention. If you are working with an agency that recommends and charges for such things, fire them. As digital media continues to evolve, how you speak to them needs to evolve, too.

Go digital

News directors, assignment editors and reporters are becoming more and more available via social media. If you compare sending a press release to an already-overstuffed generic news inbox with being able to talk directly to decision- makers, the choice is obvious.

Sure, it takes more work to figure out who you need to talk to, and what their Twitter and Facebook IDs are, but the return on the investment of your time is well worth it.

Just make sure that your social media feed backs up the story you are trying to sell. It’s easy to confirm or discredit a person’s expertise with a few clicks of the mouse.

Be a storyteller

If you want media coverage, think like a storyteller. Pitch your story in a way that will resonate with reporters. Regardless of what medium you use, if you can make the decision-maker visualize how your story can come together and how it will be told, you have made their lives easier and, therefore, increased the likelihood of your story getting picked up.

Why is your business interesting? What value does it offer? Why should people care? These are a few basic questions that should spark some answers when it comes to creating and selling your story.

Online video works


We live in an increasingly visual, interactive and engaging online world. Online video is still relatively new as a communication medium, and not yet widely used as far as media relations go. (This will soon become the expected norm, mark my words).

So, if you want to really stand out and ‘wow’ a decision maker at a news outlet, use video to tell or introduce your story. Video engages and can sell a story like no other medium available today.

My company has had many clients say the use of video has been the most effective tool in their media kits. Others have had media approach them after coming across their businesses’ online video story. It would be nice to have media come after you, rather than the other way around, wouldn’t it?

Like it or not, the face of media relations has changed. It’s impossible to talk about a PR campaign and not mention the use of social media or video these days. Make a few basic tweaks to your strategy and you’ll be well on your way to additional exposure for your business, whether it comes from traditional or new media approaches.

Lisa Ostrikoff is a TV journalist/anchor-turned-creator of BizBOXTV , a web video and social media marketing agency based in Calgary. Find her onTwitter and Facebook .

The Secrets for Selling to 'Main Street': Top Small Business Selling Techniques

 A recent report from payroll firm ADP notes that in the U.S., 193,000 more people worked at businesses with 1-19 employees in February 2013 than before the recession. I find this very interesting.

The reasons, the report notes, have less to do with a surge in new hiring than the fact that fewer small businesses have been affected by the mass layoffs the nation’s largest organizations have faced. While America’s “main street” businesses face growing pressure from internet sales and big box retailers, small and local businesses continue to be a strong force in the national economy and an increasingly important source of American jobs.

I had the chance to visit this week with Erik Blomquist, the VP of business development for LunaWebs, a web development firm that specializes in the design and creation of sites and applications for—you guessed it—small to medium firms. Here’s what Erik had to say about the secrets to selling products and services to the nation’s hundreds of thousands of “main street” and community businesses:

1. Become Part of Your Community’s “Main Street.” To sell to small business, you should become a genuine part of small business. This requires time, effort, and most especially a commitment to spending time with small business owners on their own turf. Says Blomquist: “I learned this lesson during my first week in a new job. I had left a job where I spent significant time traveling internationally and living the dream.

“When I began my new job, I quickly found myself scheduled to attend a conference in Colby, Kansas—a far cry from Kuala Lumpur. As I drove to the conference, I asked myself several times, ‘What am I doing in Colby, Kansas, attending a conference at a Comfort Inn?’ I did not know I was about to learn one of the best ways to build a business.”

2. Work Hard. “My father and grandfather had taught me to work hard. They taught me to cut all the grass, to pick all the cherries and to finish all of my homework. Professors and mentors had taught me to work hard on analyzing the facts, building strategies around solid goals and objectives, and to continually work until the work is entirely done.

“What I learned that day in Colby, Kansas—and in many subsequent years—was a lesson that was not taught to me by parents, mentors or professors. Instead it was learned through a practice that fewer and fewer people experience, especially today. It is a simple principle, and one that has ample evidence in the business world of today, just like yesterday.”

“For example, Standard Oil experienced success because of local owners and operators who were visited by a Standard Oil business development person. These individuals went in person to the small towns and big cities throughout the nation to establish relationships and convince someone locally to open a gas station. It was a relationship sale.

“William Randolph Hearst and Joseph Pulitzer built their newspaper and media industries in a similar fashion. They established relationships with local newspaper publishers and editors, invented syndication and eventually created the largest newspaper and media holding companies of their day. The same principles apply today. But in an effort to consolidate and cut expenses, we have often forgotten that what humans and customers crave is relationships.”

3. Build Relationships. “Small business customers want someone to care for them. They want someone to talk to. They want to do business with someone they know and care about and who cares equally strongly for them. Businesses today have forgotten that having a salesperson in every state or even several salespeople in each state can be the key to true success because the company’s ultimate success is based on caring for their customers.”

4. Care for Your Customers. “Technology has many uses. I have dedicated my career to technology. When technology saves money, increases efficiency and helps to accomplish tasks that were never before possible, it is a great thing.

“When technology keeps a company and the individuals in the company from engaging with their customers and building the bonds of an unbreakable relationship, it becomes a detriment. The products may be quality offerings that the market needs, but every market will have at least several participants. Without relationships, it may be easy to lose a customer.

“It is very easy for a customer to leave and move to another vendor if their only relationship is what I would categorize a ‘light relationship’ (based on marketing emails, support forums, and limited communication with the people of the company). However, it is nearly impossible to break the bonds of a deep relationship between a customer and vendor. When you know your customers’ birthdays, the names of their children, their hobbies and you know each customer as an individual, it is a relationship you are never likely to lose. These principles help to drive brand loyalty.

“I would never advocate reverting back to the days of the milkman and the paper delivery boy. I would, however, hypothesize that for every business there is an appropriate mix of light and deep relationships, and that every sales and marketing plan should include the right mix. In other words, when building a company and a sales plan, you must first know the type of relationships you want to have with your customers, and determine the ways you can and should take the working relationship to them (a la pharmaceutical companies), or whether the relationships will come to your company.”

5. Be Proactive and Personal. “The deepest relationships are proactive and personal. These are the relationships that hold the most value, and, by extension, will bring the most revenue to your growing business, as well.”

Erik’s secrets for selling to “main street” are a fundamental secret for my own company’s increasing success. Of every award, Fishbowl’s most prized acknowledgement is the one that came from our local community: Utah’s Best of State award for enterprise software (which we have now received for two years in a row). Our community has some of our most avid customers, and our partner relationships (which I would characterize as strong and genuine friendships) with our customers run deep. This, indeed, is the secret of selling to small business. Are you up to the task? I welcome your thoughts.

David K. Williams, Contributor

Leaning In: The 10 Fastest-Growing Women-Owned Businesses

BY Jenna Goudreau

Image credit: Shutterstock

 

In the midst of Sheryl Sandberg's popular initiative to empower women in business, it appears more of them are indeed leaning in to grow their businesses. In the U.S., an estimated 8.6 million women-owned businesses contribute $1.3 trillion to the economy and employ 7.7 million Americans, according to an April report commissioned by American Express OPEN, the credit card giant's small business division. What's more, the number of women-owned firms with $10 million or more in annual sales has increased 57 percent over the past decade.

To spotlight some of the major companies owned by women, nonprofit membership group Women Presidents' Organization (WPO) today released its sixth annual list of the 50 fastest-growing women-owned or led businesses in North America. The companies that made the list generated a combined $3.2 billion in 2012 revenues and employ an average of 641 employees each.

"Women are growing very substantial businesses, and not in the traditional areas that you'd expect women to be in," says Marsha Firestone, president and founder of WPO, citing a concentration of manufacturing, staffing and consulting businesses on the list. "Women don't just bake cookies and make crafts. They're starting businesses that can be scaled."


To be considered, the privately held businesses had to have either a female founder with a majority stake or a female leader with some ownership, who runs the company on a day-to-day basis. The companies supplied their revenue figures for the years 2008, 2010 and 2012, and were ranked by revenue growth over that period.

Here's a snapshot of the top 10 fastest-growing businesses and their leaders from the list:
No. 1: Shazi Visram, Happy Family in New York, N.Y.
Launched in 2006, Happy Family makes packaged organic meals and snacks for all age groups. It reported gross revenues of $63 million last year. 

No. 2: Kathy Mills, Strategic Communications in Louisville, Ky.
Strategic Communications provides communication and IT services to business and government clients. Between 2010 and 2012, its gross revenues grew 80 percent to $42 million. 

No. 3: Shelly Sun, BrightStar Franchising LLC in Gurnee, Ill.
The health-care staffing franchisor was founded in 2002 and now counts over 250 locations across the U.S. and $212 million in gross revenues. 

No. 4: Tiffany Crenshaw, Intellect Resources in Greensboro, N.C.
Intellect Resources provides consulting, recruiting and hiring solutions for businesses in the health-care IT market. Its gross revenues climbed from $1.5 million in 2010 to $30 million last year. 

No. 5: June Ressler, Cenergy International Services LLC in Houston, Texas
Founded by Ressler in 1996, Cenergy provides workforce solutions such as consulting and logistics management to clients in the oil and gas industry. It reported nearly $250 million in gross revenues in 2012. 

No. 6: Sue Bhatia, Rose International Inc. in Chesterfield, Mo.
Rose International, an IT professional services and consulting firm, was founded in 1993. Between 2010 and 2012, its gross revenues grew more than 50 percent to $360 million. 

No. 7: Anita Emoff, Boost Technologies in Dayton, Ohio
Specializing in employee wellness, recognition and awards, Boost Technologies reported $17 million in gross revenues last year, up from less than $1 million in 2008.

No. 8: Kathleen Croddick, Suite K of South Brunswick, N.J.
Founded and run by Croddick, Suite K Value Added Services LLC manufactures beauty products such as fragrances, creams and lotions. Its gross revenues grew more than 150 percent between 2010 and 2012 to $13 million.

No. 9: Lani Hay, Lanmark Technology in Vienna, Va.
Lanmark Technology provides professional services such as IT and administrative support to clients in the government and commercial sectors. It reported gross revenues of $35 million in 2012.

No. 10: Ranjini Poddar, Artech Information Systems LLC in Cedar Knolls, N.J.
With gross revenues of nearly $350 million, Artech is the largest women-owned IT staffing company in the U.S., according to WPO.

8 Common Bad Habits That Ruin Client Relationships

 By Vivian Giang

When you’re running a small business—especially in the early stages—it’s easy to simply focus on how to stay afloat. The problem is, that mindset will keep your company mediocre at best and fighting for survival at worst.

In the first months of launching their real estate company Those Callaways, Joseph and JoAnn Callaway learned just how much real growth starts with client relationships. In that situation, they decided to forfeit a deal because it was the best choice for their client. Since then, their business brings in around $100 million in sales annually and reached $1 billion worth of resale in the first 10 years of business.

In their book Clients First: The Two Word Miracle, the Callaways discuss where most business owners go wrong when developing relationships—and how to fix the problems. Most employers are guilty of these bad habits without even being aware of it, and these habits can not only ruin relationships, but they can negatively affect business too.

1. Being too sure of yourself.
The Callaways say that when you have a healthy perspective of who you are, it will help you stand apart from your competitors, but when you’re too focused on recognition, you may veer off “onto a destructive path.”

“No client likes working with someone who has a patronizing attitude or constantly sings his own praises,” Joseph says. “Your job is not to be the most important person in the room or to put others down. Believe me, when you take care of your clients first and foremost, they will take care of you through their loyalty and appreciation.”

Instead, Joseph advises that you should always focus on your client. Don’t try to find a common interest just so you can bring the conversation back to yourself.

 

2. Thinking it’s just a job.
The only way you can honestly put a client first—time after time—is if you actually really do care about your job and what it means to society. If you have to, try to make a connection between what you do and how that affects the bigger picture.

“Whether you are a CEO or installing brake pads, you can learn to love what you do in that you feel pride in your work and strive to be better,” Joseph says. “Having any other attitude will only make you miserable and drive clients away.”

To fix a negative pattern of thinking, the Callaways say you should think of specific things you can do to ensure you’re always growing professionally. For example, look into seminars related to your field and continually network so you can meet and learn from people in your industry.

 

3. Telling “white lies,” which includes exaggerating.

If you’ve ever told your client you’re sick just so you can have a few more days to work on a project, then you’re guilty of not being entirely honest with someone who is paying you to be honest.

“When you cultivate a reputation for rock-solid honesty—for laying out all your cards even when it doesn’t benefit you, for telling the whole truth, for never holding back or sugarcoating—you’ll gain customer loyalty that money can’t buy,” Joseph says. “Clients will trust, respect and refer you, and your own life will become easier."

 

4. Being too professional.
Do you see your clients as business opportunities and sources of income, or do you see them as actual human beings with likes, preferences, quirks and stories? If you want to truly put your clients first, you need to think of them as more than sources of income. You should treat clients—and potential clients—as if they’re different from any other.

5. Thinking you’re always right.
The Callaways say that it’s easy to think you’re always right, especially if you’re the expert and the most qualified to make decisions. Although this may be true, it doesn’t mean that other opinions don’t matter.

“No matter what industry you’re in, you need to turn your viewpoint around and make a sincere effort to see yourself and your business as your client does,” Joseph says.

You can always ask the client what they think about your business, especially if the deal fell apart and they no longer conduct business with you. If you’re willing to accept this feedback and change your business model based on it, you can stop yourself from making the same mistake with the next client.


6. Being stingy with time and money.
Yes, your time is valuable, but the first sign that you’re trying to wrap up with a client quickly so you can get to the next one will probably be the last time you get that client’s business.  

“I remember being very apprehensive about donating a large sum of money to build a Habitat for Humanity house as a Christmas gift for our clients,” Joseph says. “I thought I’d never see that money again. But in the years since, I’ve learned that new clients chose us—and even that a bank gave us all of their foreclosures to sell—because they had learned of that donation.”
That might not be the scenario for every case, but Joseph says it shows the time and money you use for something will eventually “come back to you with interest.”

 

7. Failing to express genuine gratitude.
If people don’t feel valued, they’ll likely take their business elsewhere, so it’s risky to take people for granted.

“JoAnn and I have realized that there are many ways to say ‘thank you’ to clients, and not all of them are verbal … you can show clients just how much you appreciate them by getting to know them personally, forgiving occasional bad behavior, and staying up-to-date in your field so you can give them the highest level of service,” Joseph says.

 

8. Doing everything yourself.
When you truly care about the success of your business—and about the well-being of your clients—it can be hard to let go of any aspect of your work. The thought of allowing someone else to take over any area of responsibility is extremely difficult, but necessary. In actuality, one of the most important aspects of running a successful business is understanding how to delegate responsibilities to others. Otherwise, what ends up happening is that “you become stretched too thin, feel overwhelmed and actually become less effective,” Joseph says.

Although it may be common to think about your business on a short-term basis, such as making enough money this month to pay the bills, the Callaways say that building the long-term relationship with clients is what will keep you in business and set you apart from your competitors.

“Most business owners are so concerned with paying the bills that we instinctively put ourselves first,” he explains. “It’s a behavior fueled by fear. But when you really put the customer first, and put your own needs second, a whole lot of other things naturally fall into place. Decisions will become easier, your business will flourish, and your relationships will be based on true transparency.”

Vivian Giang

Vivian Giang is a reporter for all things career-related at Business Insider. Previously she freelanced for Dan Rather Reports and worked in public relations in Colorado. She's had internship stints with CBS, CNN and TBS. 

Her work has also been published in The New York Times' Local East Village blog, CBSnews.com, Yahoo!, The Financial Times, The Fiscal Times, Flagpole Magazine and Southern Distinction Magazine.

Vivian has an M.A. in Business and Economic Reporting from New York University and a B.A. from the University of Georgia. She resides in Chinatown and is working on a collection of short stories.