Three Options for Finding Capital

Where there once were two options for finding capital, now there are three.

Staying Private

A company can stay private and attempt to acquire capital through private placement memorandums (PPMs), venture capitalists, angel groups, or loans.

PPMs have been difficult to obtain lately, as the requirements for being an accredited investor have increased, and non-accredited investors cannot, for the most part, participate. PPMs are time consuming in their creation. A company that is trying to access capital through a PPM cannot by law advertise that the 

PPM is available. It is strictly through a business owner’s warm leads (friends, family, and business associates) that a PPM can be offered.

Venture capitalists and angel groups will often invest in ideas and businesses that they believe in. However, extensive business plans and PowerPoint presentations are often requested in order to get an audience with them. Once business owners find a venture capitalist or angel who is willing to invest, agreements of ownership and interest rates must be made. Often, these investors request a significant amount of the company to participate and/or a significant amount on interest. However, business owners who feel desperate and who believe that this is the only way to obtain the capital they need often take this route.

Many banks today are not investing in businesses that do not have the collateral to secure the loan. Business owners that do not have assets to cover the amount of capital that they need cannot, in most cases, get a loan. If you are a business owner that has sufficient assets to use as collateral to secure a loan, and you need to raise capital, this is a viable option.

Going Public

A company can pay hundreds of thousands, if not millions of dollars to have the privilege of participating in the traditional stock market arena. The Securities and Exchange Commision requires extensive state and federal filings and reports for publicly held companies. Often, the waves of trading (whether high and then low, or low and then high and then low again) in traditional markets have not reflected the comparative state of the companies being traded.

These factors and others, such as the risk of losing control over the direction and orchestration of the now public company has made private business owners hesitant to take part in the traditional public markets. In fact, out of more than two million companies who could qualify to post with NYSE or NASDAQ, less than ten thousand companies are actively being traded.

Being Independent

The Independent Stock Market provides a marketplace for business owners to offer their personal stock for sale. Owners no longer need to look at PPMs as options, as ISM allows the advertising and the use of accredited and non-accredited investors to participate. Owners no longer need to seek out venture capitalists, angel investors or banks for loans to find capital, since with ISM they can access the capital they need without giving up a significant portion of their company, without paying interest, and without having assets to use as collateral.

The Independent Stock Market provides a venue for private business owners wanting the benefits of the traditional markets without many of the risks and additional reporting they require. Owners can find the capital they need and receive the liquidity they want in a marketplace that provides a simple buy/sell model without the twists and turns of outside influences.

Increase the Market Value of Your Privately Held Company by Removing the Lack of Marketability Discount

Certified valuators determine the value of a company by reviewing several risk factors. When their assessment is complete, one of the last questions they ask is if the company that is being valuated is a privately held company, a publicly held company, or if it is a company that shortly will become public or return from being public to become privately held again.

Privately held companies that have no plans in the near future of becoming publicly traded receive what valuators refer to as a “Lack of Marketability Discount.” Over the last 40 years, the average discount valuators have given privately held companies is 30%. This means that a ten million dollar company that is private, on average, would only be valued at seven million dollars.

The reason why valuators make this significant discount is because the purchaser of the company has limited opportunities were he or she to try to sell the company at a later date.  If the company were publicly traded, the buyer could simply sell off a portion or all of his stock in the company to the general public and thereby retake his investment – hopefully at a profit.

Privately held company owners would have to wait for another buyer in order to retake their investment.  The Lack of Marketability Discount protects the buyer from paying full price for a company that he might not be able to sell when and if he ever wanted to sell it.

One way to increase the market value of your privately held company is to go through the processes available to make stock in your company available to the public. Some companies are afraid, unsure about, or opposed at the idea of taking their business public in the traditional markets. Even those business owners that understand the Lack of Marketability Discount are often unwilling to take that step into the public trading realm.

Sometimes cost is a factor. Other times it is all the files and reporting that they dread. Sometimes they fear the traditional markets themselves with the waves of changes in stock prices that are often unrelated to the actual stability and growth of the business itself.

If you are a business owner of a privately held company who would like to remove the Lack of Marketability Discount without all the worries of the traditional markets, call the Independent Stock Market today.

The Pros and Cons of Private Placement Offerings

Sometimes business owners need money and they think private placement memorandums are the best choice. Private Placement Offerings (PPOs) have their time and place, but some business owners are unsure of when and where that is.

If your business is just getting started, a PPO might be a legitimate option. Although preparing PPOs by oneself is time-consuming and stress producing, preparing PPOs can help your business if you have family and friends that know that you need money and have the ability and desire to help you. PPOs probably can’t help you if you have no family members or friends who do not have the desire or the means to help you. This is because PPOs require that the people involved know you. They must be associated with you or your company personally. They are called Private Placements because you must keep the information about the need for capital within your primary market and cannot use the general public to fulfill your needs.

If you are able to use friends and family, be as conservative as possible in your projections. One of the negative aspects of PPOs is that if you don’t do what you say you’re going to do, you might get a talking to at the office – but the heated and downbeat conversation also might spill over into family reunions.

If your friend or family member wants to invest by using a PPO, try to make an arrangement to return his investment that you will be happy with too. If he is asking for a high percentage of the company, for example, might not matter to you when you sign the contract – because you are getting the money you need. However, it will matter to you if he decides to sell it, or get a new manager, or introduce a new product that you are against selling. 

For PPOs, most investors must be accredited. That means they need to have a net worth of more than a million dollars not including their homes. With today’s economy the way it is, accredited investors can be difficult to find.

If you have been in business for more than two years, and your business is worth more than $2.5 million dollars, posting your business with the Independent Stock Market (ISM) is a much better option than a PPO. With ISM you can use accredited and non-accredited investors. You can advertise that you are looking for capital to the general public. You can use your sweat equity and initial investment to get the capital you need, without paying interest or giving up control of your business.

If you have a smaller business though, or have not been around long enough to qualify to post with ISM, the ISM Business Development Group can help prepare your company for a Private Placement Offering so that you do not have to try to perform the process for yourself. Contact an ISM representative today.

Creative Minds: Second Market and Shares Post Are No Competition f...

Creative Minds: Second Market and Shares Post Are No Competition f...: Second Market and Shares Post are companies that offer shareholders an opportunity to sell their privately held stock without the consent –...

Second Market and Shares Post Are No Competition for Independent Stock Market

Second Market and Shares Post are companies that offer shareholders an opportunity to sell their privately held stock without the consent – and often without the acknowledgement of the privately held companies. In order to participate, shareholders contact Second Market and SharesPost and let them know that they would like to sell their private stock to accredited investors. 

An accredited investor is someone who has a net worth of more than one million dollars. This year they made the distinction of being an accredited investor a little more difficult by stipulating that the total net worth of the investor cannot include his or her place of residence. Individuals can qualify as accredited investors if they earn at least two hundred thousand dollars a year. Couples can become accredited investors if they earn at least three hundred thousand dollars a year combined.

At times, the seller has a hard time finding a buyer, with these companies, because only accredited investors can participate. There is a hefty transaction fee for performing this service that both the buyer and the seller pay Second Market and SharesPost. The fee is hundreds of times what you would pay online for publicly traded stock.

The independent Stock Market (ISM) works with private business owners and their shareholders to provide them with a marketplace to sell their stock.  Instead of sneaking around behind the business owner’s back to trade stock like Second Market and Shares Post do, ISM works with the business owner to ensure the trading remains at the level the owner desires. One wrong move from a seller with Second Market and
SharesPost and the once private company could be thrown into public status with all the state and federal filings and reports that public status requires.

Unlike Second Market and SharesPost, accredited and non-accredited investors can participate in the buying and selling of stock with ISM. This means that you don’t have to be a millionaire to get access purchase shares in a company that you believe in.

Instead of paying exorbitant transfer fees for each transaction like Second Market and SharesPost, the Independent Stock Market has a minimal fee while allowing purchasers the opportunity of being significant partners in businesses that they believe in. In many cases, shareholders will be one of less than 500 total shareholders in companies whose stock is available on the ISM marketplace.

ISM has the consent of the business owner in making the trade. ISM allows both accredited and non-accredited investors. ISM’s transaction fees are significantly lower than Second Market and Shares Post. It’s easy to see how the Independent Stock Market performs head and shoulders above its competition.

Second Market and Shares Post Are No Competition for Independent Stock Market

Second Market and Shares Post are companies that offer shareholders an opportunity to sell their privately held stock without the consent – and often without the acknowledgement of the privately held companies. In order to participate, shareholders contact Second Market and SharesPost and let them know that they would like to sell their private stock to accredited investors. 

An accredited investor is someone who has a net worth of more than one million dollars. This year they made the distinction of being an accredited investor a little more difficult by stipulating that the total net worth of the investor cannot include his or her place of residence. Individuals can qualify as accredited investors if they earn at least two hundred thousand dollars a year. Couples can become accredited investors if they earn at least three hundred thousand dollars a year combined.

At times, the seller has a hard time finding a buyer, with these companies, because only accredited investors can participate. There is a hefty transaction fee for performing this service that both the buyer and the seller pay Second Market and SharesPost. The fee is hundreds of times what you would pay online for publicly traded stock.

The independent Stock Market (ISM) works with private business owners and their shareholders to provide them with a marketplace to sell their stock.  Instead of sneaking around behind the business owner’s back to trade stock like Second Market and Shares Post do, ISM works with the business owner to ensure the trading remains at the level the owner desires. One wrong move from a seller with Second Market and SharesPost and the once private company could be thrown into public status with all the state and federal filings and reports that public status requires.

Unlike Second Market and SharesPost, accredited and non-accredited investors can participate in the buying and selling of stock with ISM. This means that you don’t have to be a millionaire to get access purchase shares in a company that you believe in.

Instead of paying exorbitant transfer fees for each transaction like Second Market and SharesPost, the Independent Stock Market has a minimal fee while allowing purchasers the opportunity of being significant partners in businesses that they believe in. In many cases, shareholders will be one of less than 500 total shareholders in companies whose stock is available on the ISM marketplace.

ISM has the consent of the business owner in making the trade. ISM allows both accredited and non-accredited investors. ISM’s transaction fees are significantly lower than Second Market and Shares Post. It’s easy to see how the Independent Stock Market performs head and shoulders above its competition.

 

How to Determine the Value of Your Company

Various factors come into play when third-party certified valuators are assessing the value of a privately held company for the Independent Stock Market. Here are some of them.

Quality and Depth of Management When a company has competent, well-trained managers, and many of them, the business is likely to run smooth. If your business has an established training program and strives to promote from within the organization, you are likely to rank high in this area.

Importance of Key Personnel   If there is only one key player (the CEO, for example) that is holding everything together, without a realistic replacement, you will likely score low in this risk area. Especially if the purpose of the valuation is to sell the company so that the key player can retire.

Stability of Industry Some industries that have been stable in the past are having issues with this area currently – such as the real estate and motorized vehicle industry. If your industry has continued to move forward throughout the recession, there is a good chance you will score high here.

Diversification of Product Line    Do you stick to one product? Do you stick to several products?  In most cases, valuators are looking for a happy middle ground. One product might be overtaken by an competitor. Several products might not give you the ability to concentrate on its efficiency, improvement, or marketing.

Diversification of Customer Base    In this instance, the broader the customer base, the better.  I have seen several instances where companies have been purchased for the value of their customer base alone – regardless of poor inventory and management. Of course happy customers are worth more. Often this can be determined through testimonials, percent of return customers, and percent of complaints.

Diversification & Stability of Suppliers        Relationships with key vendors and the probability that those suppliers will continue their relationship with the company is a key ingredient in the valuation process. Having back-up vendors is critical as well. If your only vendor goes out of business, or raises his prices significantly, it could hurt your business.

Geographic Location     The real estate slogan “location, location, location” refers to the importance of this risk factor. Were a solid and productive company in one location to open its doors in a non-receptive place, it would go out of business.  This can be determined by the number of customers, and potential customers.

Stability of Earnings     If you have had steady increases in revenue throughout the years, at least in the last three-five years, you will rank high in this area. Stability in revenue shows the potential to continue that trend in the future. Companies bringing in significant revenue consistently should seek a higher price when selling their company than those who do not.

Earnings Margins     Bringing in lots of revenue is one thing – but making a profit consistently is just as or even more important. Breaking even is not seen as big of a negative factor as losing money is. Continuous quarters in the red will bring in a lower sales price, even if the company purchasing the company has the tools and resources to reverse the negative trend.

Financial Structure    There are many factors that could determine whether businesses score high in this area. Some of which, regrettably, are subjective in nature instead of objective. Are key personnel spending “too much” on wages or perks? Is the cost of goods over 30% of revenue? What is the cost of your building and maintaining it? Are their loans with significant interest rates that will not be paid soon? These are some of the questions valuators ask about a company’s financial structure.

When determining the value of your business, take a good look at where you stand regarding each area discussed. If you have questions, call the Independent Stock Market. Perhaps there is an area where you can improve the processes, increase the quality of staff, or decrease expenses before you have a certified valuator tell you what your company is worth.

How to Determine the Value of Your Company

How to Determine the Value of Your Company

Various factors come into play when third-party certified valuators are assessing the value of a privately held company for the Independent Stock Market. Here are some of them.

Quality and Depth of Management When a company has competent, well-trained managers, and many of them, the business is likely to run smooth. If your business has an established training program and strives to promote from within the organization, you are likely to rank high in this area.

Importance of Key Personnel   If there is only one key player (the CEO, for example) that is holding everything together, without a realistic replacement, you will likely score low in this risk area. Especially if the purpose of the valuation is to sell the company so that the key player can retire.

Stability of Industry Some industries that have been stable in the past are having issues with this area currently – such as the real estate and motorized vehicle industry. If your industry has continued to move forward throughout the recession, there is a good chance you will score high here.

Diversification of Product Line    Do you stick to one product? Do you stick to several products?  In most cases, valuators are looking for a happy middle ground. One product might be overtaken by an competitor. Several products might not give you the ability to concentrate on its efficiency, improvement, or marketing.

Diversification of Customer Base    In this instance, the broader the customer base, the better.  I have seen several instances where companies have been purchased for the value of their customer base alone – regardless of poor inventory and management. Of course happy customers are worth more. Often this can be determined through testimonials, percent of return customers, and percent of complaints.

Diversification & Stability of Suppliers        Relationships with key vendors and the probability that those suppliers will continue their relationship with the company is a key ingredient in the valuation process. Having back-up vendors is critical as well. If your only vendor goes out of business, or raises his prices significantly, it could hurt your business.

Geographic Location     The real estate slogan “location, location, location” refers to the importance of this risk factor. Were a solid and productive company in one location to open its doors in a non-receptive place, it would go out of business.  This can be determined by the number of customers, and potential customers.

Stability of Earnings     If you have had steady increases in revenue throughout the years, at least in the last three-five years, you will rank high in this area. Stability in revenue shows the potential to continue that trend in the future. Companies bringing in significant revenue consistently should seek a higher price when selling their company than those who do not.

Earnings Margins     Bringing in lots of revenue is one thing – but making a profit consistently is just as or even more important. Breaking even is not seen as big of a negative factor as losing money is. Continuous quarters in the red will bring in a lower sales price, even if the company purchasing the company has the tools and resources to reverse the negative trend.

Financial Structure    There are many factors that could determine whether businesses score high in this area. Some of which, regrettably, are subjective in nature instead of objective. Are key personnel spending “too much” on wages or perks? Is the cost of goods over 30% of revenue? What is the cost of your building and maintaining it? Are their loans with significant interest rates that will not be paid soon? These are some of the questions valuators ask about a company’s financial structure.

 

When determining the value of your business, take a good look at where you stand regarding each area discussed. If you have questions, call the Independent Stock Market. Perhaps there is an area where you can improve the processes, increase the quality of staff, or decrease expenses before you have a certified valuator tell you what your company is worth.

 

Disadvantages of Companies That Choose to Stay Private

There are several reasons why business owners decide to stay privately held.  One reason is that they enjoy the non-public nature of their business dealings. It is not that they are doing anything wrong; it is just that they are not thrilled with the idea of having to explain every little expense to the public.

The other reason that business owners choose to stay private is that they are hesitant to join the public market arena. They might not want to pay the costs involved, or they might not understand how it all works. They might worry about losing control of their business model. Most of them are not familiar with the Independent Stock Market, and how these and other hesitancies of going public are removed.

So, rather than learn about the safe, inexpensive, easy-to-understand ISM marketplace, they stay private and continue to work against all its disadvantages.

In this article, we will discuss two of the disadvantages of remaining privately held.

Difficulty in obtaining capital

Private business owners use several methods in their attempt to get capital. Some use Private Placement Memorandums or Offerings. These are difficult to obtain, because business owners cannot advertise that they are looking for capital and because accredited investors must provide the majority of the capital brought in. Another means of trying to obtain capital is through banks. This has become increasingly difficult because most banks require collateral and most business owners need the money because of their current lack of collateral.

Some business owners of privately held companies have sought after venture capitalists. The large majority of these investors require either a significant amount of interest on their money, a significant percent of the owner’s company, or both. Because business owners that need capital find it difficult to find capital elsewhere, they often make this choice, often regretting the decision later.

Lower market value upon sale or merger of the company

When privately held companies receive valuations before a sale or merger, the market value, on average, is 30% lower than a company of the same size and value whose stock is publicly traded. This is because the stock in a private company isn’t marketable, and therefore cannot be traded easily.  Someone buying a public company has an exit strategy that private companies do not, that is why owners of public companies receive full value for their businesses.

For private business owners who want the benefits of public companies without the challenges of the traditional markets, contact the Independent Stock Market.

Disadvantages of Companies That Choose to Stay Private

There are several reasons why business owners decide to stay privately held.  One reason is that they enjoy the non-public nature of their business dealings. It is not that they are doing anything wrong; it is just that they are not thrilled with the idea of having to explain every little expense to the public.

 

The other reason that business owners choose to stay private is that they are hesitant to join the public market arena. They might not want to pay the costs involved, or they might not understand how it all works. They might worry about losing control of their business model. Most of them are not familiar with the Independent Stock Market, and how these and other hesitancies of going public are removed.

So, rather than learn about the safe, inexpensive, easy-to-understand ISM marketplace, they stay private and continue to work against all its disadvantages.

In this article, we will discuss two of the disadvantages of remaining privately held.

 Difficulty in obtaining capital

Private business owners use several methods in their attempt to get capital. Some use Private Placement Memorandums or Offerings. These are difficult to obtain, because business owners cannot advertise that they are looking for capital and because accredited investors must provide the majority of the capital brought in. Another means of trying to obtain capital is through banks. This has become increasingly difficult because most banks require collateral and most business owners need the money because of their current lack of collateral.

Some business owners of privately held companies have sought after venture capitalists. The large majority of these investors require either a significant amount of interest on their money, a significant percent of the owner’s company, or both. Because business owners that need capital find it difficult to find capital elsewhere, they often make this choice, often regretting the decision later.

Lower market value upon sale or merger of the company

When privately held companies receive valuations before a sale or merger, the market value, on average, is 30% lower than a company of the same size and value whose stock is publicly traded. This is because the stock in a private company isn’t marketable, and therefore cannot be traded easily.  Someone buying a public company has an exit strategy that private companies do not, that is why owners of public companies receive full value for their businesses.

For private business owners who want the benefits of public companies without the challenges of the traditional markets, contact the Independent Stock Market.

 

 

The Advantages of Social Commerce

With recent economic tightening and uncertainty, many businesses are looking to cut corners and find less expensive ways to reach their customer base. In today’s world, where much of our business seems to be more and more online, the rise of social commerce is meeting many of these companies needs.  Social proof companies like Shopper Approved can give online businesses a open look as to their business’ online effectiveness.

For the most part, online advertising is much less expensive than advertising on television, radios, newspapers and magazines. In fact, businesses are able to build virtual store fronts on social media sites like Facebook, Twitter, YouTube, MySpace, and others without any monthly rent or lease program. Just build the page or profile and you can stay for free.

Of course, to advertise on these sites and search engines, there are fees. But most are relatively inexpensive. Placing ads on social media sites is a cheap alternative to standard advertising and it’s growing more popular as more and more people realize the popularity and easy access to social commerce consumers. Since there are millions of consumers online daily, it makes sense to use a percentage of your business’ marketing dollars for online networking and advertising.

The advantage of advertising on social media sites is that ads can be assigned to show up based on a user's profile preferences. Basically, social commerce is a form of indirect social media marketing that allows you to make more money online, without having to waste money purchasing television time, or a spot in the New York Times. But it is also a good location to build upon advertising money spent on TV commercials, for example. A TV commercial placed online has the potential of being seen millions of times for free.

Social commerce rating and review programs like Shopper Approved are also advantageous because they give businesses insightful information on their consumers’ responses to products, service, and overall buying experience. So if you’re business doesn’t have an online presence yet, it’s time to get with the twenty-first century and start taking advantage of all the financial benefits e-commerce has to offer.

The Purpose of Website Reviews

Do you have an online business up and running? If you already have your website set up, that is great! However, you want to be sure that your website is user-friendly and that it is doing what it needs to do to attract and keep customers on your website. Website reviews provided by previous customers give you the opportunity to find out what your customers think about your website and see how many of them are planning on purchasing even more of your products. It also gives you the opportunity to display favorable reviews on your website for new visitors to evaluate.

Did you know that the average customer is only on a website for about 33 seconds? That usually isn’t enough time to buy a product or even look at many offers, unless the page is taking the customer to the exact page they need to be to make the purchase.

You can find out how long customers stay on your site by using software like Google Analytics. Software programs like these can tell you where your visitors live, what pages they visited, and even if they purchased your product. They can tell you who many people visited your site this month vs. last month and even what day was your most visited.

What these analytical software programs can’t tell you is if the visitors who became customers were happy with the purchase or not. Only website review and rating software like Shopper Approved can do that.

The purpose of a website review from current or previous customers is to help you, the business owner, be even more successful online. Website reviews are a great way to allow customers to rate and review your website, letting you know what they like and dislike. With information from the reviews, you are then able to edit your webpage, improve your product and fine tune your service department.

How to Maintain Satisfied Customers

When Sam Walton first opened up Wal-Mart, he did it because he wanted to create a store that everyone could go to get everything they need. He wanted a “one stop shop” so he created one. Business was rough in the beginning. However he knew one business truth that helped him become one of the most successful business owners in the world. Sam Walton knew that in a business, “There is only one boss: the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else."

Walton knew the importance of customer satisfaction. If you’re not happy with a business, what do you do? You take your business somewhere else and tell all your friends how horrible that company treated you. You don’t waste your time with a business that treats you like crap. You find a company that understands that the customer deserves to be listened to and respected.

So how can you maintain satisfied customers in your business?

Step one: Realize that without your customers, you have no business. If you know this, then everything else will fall into place.

Step two: Use customer satisfaction survey software. Customer satisfaction surveys allow you to monitor how your customers feel about your business. It lets them tell you what they like and dislike, and what you need to change or improve to make them happy. Customer satisfaction surveys also give your customers the ability to add their testimonials about your product or service. Testimonials give consumers who are new to your site the privilege of seeing what previous customers have to say about your business. It is free, quality advertising.

Step three: Act quickly on any of the negative survey information provided by customers. If a customer tells you your products are too expensive, do your best to lower costs or revise your pricing structure and thank them for their input. If the customer says your employees were rude, reprimand and train your employees to provide excellent customer service. Then compensate the customer for having received poor service. Using customer survey software will only helps your business if you act upon what the customers tell you.

If you want to maintain satisfied customers, start by understanding how important consumers are to your company and act upon their thoughts and opinions. If you do this, your customer loyalty will increase just like Sam Walton’s did.

Extraordinary Customer Service

The other day I was at Texas Roadhouse and witnessed exceptional food, devoted employees, and quick, efficient service. Their ribs I ate fell right off the bone and tasted so delicious I could have eaten them all day long. The employees were happy. They even line danced a little, bringing a great party-like atmosphere into the restaurant. The waitress remembered our order precisely and even offered dining suggestions. I was experiencing extraordinary customer service – and it was about to get even better!

About ten minutes after they had closed the doors for the night, a customer walked in. At first they apologized and informed the couple that the restaurant had closed and that they would need to come back another day. The couple asked if there was any chance they could just order a to-go meal. They explained that it was their daughter’s birthday and that she had been in the hospital all day. When the couple asked their daughter what she wanted for dinner, she told them that she wanted ribs from Texas Roadhouse. The manager heard the story and made the accommodation instantly. Within a matter of seconds a server offered to stay late to take care of them if they wanted to stay and eat instead of taking the meal to go.

As I witnessed this, I realized that this company knew the difference between obligation and consideration.  The restaurant was closed. They were not obligated to serve the couple and their daughter. But the management and staff were considerate of the situation and made an unnecessary, yet intrinsically valuable decision. There were at least 10 other couples who as customers saw the desire that the restaurant staff displayed of extraordinary customer service.  

If I had the chance to rate this company with one of those online rating and review services, I would give them five stars and provide them with my testimonial of a job well done.

Extraordinary customer service is one of the most important parts of owning a successful company. Your customers are the people that keep you in business, and if they aren’t happy in this capitalistic country we live in, they will find somewhere else to go. If they are happy, they’ll do what I’m doing and tell everyone they know to join them as satisfied customers. Word of mouth is the cheapest way to promote your company. If you show your customers great service, they will talk about it, and that is how you create a successful business. 

Building Positive Customer Relationships through Happy Employees

What do you think is the most important aspect in running a successful business?

Is it the profit? Is it the quality of the products? Is it the advanced marketing techniques? Or could it be the number of loyal customers acquired through the relationships forged with happy employees? Most successful businesses excel at all of the above.

Gordon Bethune, with Continental Airlines, spoke about the success of their company and all others. He said, “I like to think that a lot of managers and executives trying to solve problems miss the forest for the trees by forgetting to look at their people -- not at how much more they can get from their people or how they can more effectively manage their people. I think they need to look a little more closely at what it's like for their employees to come into work every day."

What he points out as potentially being the most important aspect of a successful business is the inter-connected, intra-personal/social relationship among company leaders, their subordinates and their customers.

A business will not continue to generate income without loyal customers. And loyal customers are created just as much by the value of the product as by the high level of personalized, professional service they receive – if not more so.

Customer loyalty should be every business’ ultimate goal. When your customers become loyal to your business, they will spend their money with you, hence generating larger, more consistent profits. Your employees are the face of your company. They are the people the customers see, talk to, and get their products from. Your employees should all feel happy when coming to work everyday so that they will spread their positive attitudes, energy and knowledge about the product and company to your customers.

Reviewing your company’s positive customer relationships can be done easily by utilizing customer satisfaction survey software for honest ratings and reviews. Customer relationship software helps you understand how loyal your customers are and how well your happy employees have treated them. It allows you to know what changes you need to make in order to improve your customer relations and sustain customer loyalty. 

Don’t Screw Up On Purpose, But If You Do Screw Up…

Have you ever patronized a company whose employees displayed such terrible customer service that you wanted to punch them in the gut? If you have, I would guess that you never returned to do business. Unless they fixed the mistakes and apologized and significantly compensated you for your troubles, you would tell everyone you know not to do business with them.

The ironic thing is that if they did go above your expectations in making the situation right with you, you would probably tell more people to use their services than you would have if they would have gotten your order right the first time.

I’m not saying that business owners should intentionally screw up orders so that they can make a customer extra happy. But studies show that when things go wrong, the company’s ability to exceed the customer’s expectations and create a loyal, long-lasting relationship is sharply increased.

Michael Dell, the owner of DELL computers, (which is the brand I just happen to be using to type this article) is a business man who fully understands the necessity of his customers and keeping them happy. He said, "It's customers that made Dell great in the first place, and if we're smart enough and quick enough to listen to customer needs, we'll succeed." Your customers are the people that make your business great, and if you understand that then just like Michael Dell says, you will succeed.

Great customer service is the key ingredient to the mouth-watering recipe for happy, loyal customers. It is the ribbon around a package that, besides looking good, holds every part of your business together.

When your customers are satisfied, they will be loyal to you. This means that they will keep coming back to use your product and services, making you more money and perhaps even a friendship. The best way to make sure your customer service excels is by using customer service surveys.

Online rating and review software like Shopper Approved can ask your consumers how they feel about your product or service without being annoying. If want your customers to be happy, use surveys to ask them if they aren’t happy. If they aren’t, ask them how you can make them happy. Then do what they want you to do to make them happy. This simple process is sure to bring you success.