Perceived Indifference Checklist: See if You Pass or Fail

Do you make decisions through the eyes of your customer?

Do you follow the golden rule or the platinum rule?

The Golden Rule is defined as treating others as you want to be treated. But the Platinum Rule goes a step further. It asks that you treat others as they want to be treated.

Research tells us that 7 out of 10 customers will stop doing business with you because they believe you just do not care. How many times can you say you really don’t care about your customers – just not that often.

Because of so many service and product choices your customers can easily Google up another vendor. That’s concerning so have a plan to fight perceived indifference.

First, it’s important to consider that customer’s expectations have changed over time. It’s no longer just about great service. We all now want a great, memorable experience. Loyalty to a vendor is much less important than getting what feels best for you.

A streamlined business operation should be built with careful consideration of customer satisfaction. We want to do business with businesses we know, like and trust and one that takes care of us.

Walk a mile in their shoes and Try on their rose colored glasses are two sayings to revisit and reconsider when rooting out what really matters to our best clients and prospects.

Reality is in the eye of the beholder. Get some input from customers and colleagues and create a plan that will assure your customer with the perception that you are different. You are the vendor that understands their wants and their needs and you value that.

Perceived indifference checklist

Do you answer your phone by the 2nd ring every time?

How about ask for permission to put the caller on hold?

Does anyone hold the line for more than 30 seconds?

Do you thank your customers for calling? Visiting?Do you refer to customers by their name?

Is thanking your clients for using your business a common practice?

How timely is your team for customer/client meetings?

Do you avoid making your customers wait?

Are product and services delivered when promised?

Is there a heads-up given if problems arise?

Is there a documented process for mistake and problem resolution?

Is your return phone calls/e-mails policy within the same day (within 24 hours)?

Do team members take responsibility for helping customers?

Do you ask for more information when customers ask for a quote or a price?

Is there follow up after delivery of a service or a product?

Do you stay in touch with customers regularly?

Do you ever surprise your customers with a gift?

Do you keep your customers informed about what is new in your business?

Do team members know why the customer is “king”?

Do you thank your internal customers (team members) for what they do for you and your business?

This checklist is an important tool in your sales, marketing and customer service tool kit. 

Celebrate when you can honestly answer yes and be willing to dig and investigate your customer’s experience when your answer is no to the preceding questions.

Is incorporation the right choice for my business?

For this the last post in our series on tax structures and choosing the right one for your start-up or small business, we will focus on corporations. 

What is a corporation?

A corporation is defined first and foremost as a separate legal entity distinct from its owners. Corporations have many of the same rights and privileges as individuals. Corporations can sue and be sued, enter into contracts, loan and borrow money, own assets, hire and fire employees and pay taxes.

The main reason for choosing incorporation is protection of personal assets. Because of the limited liability aspect of incorporating shareholders enjoy profits through stock appreciation or dividends but are not personally liable for company debts.

Corporations can exist in perpetuity regardless of persons involved leaving, dying or divesting in the business. There are three main types of corporate classifications, General Corporations, C-Corporations and S-Corporations.

The three main types of corporate classification

General Corporations - With this type of business structure the shareholders are the owners of the company. The number of shareholders allowed to invest in the company is unlimited. The stock or shareholders are not personally liable for company debt.

The personal liability of stockholders is generally limited to the amount of their investment. This is the most common type of corporate class structure. Advantages of forming a General Corporation include better access to capitol and certain tax-free benefits. However, this type of structure is often subject to more state and federal regulations.

C-Corporation - The first main distinction of a C-Corporation from an S-Corporation is that C-Corporations are taxed as an entity and profits are simply distributed as dividends. C-Corporations do not have to file financial statements and have a great deal of business flexibility. However, C-Corporations must have a director who offers available shares for sale to current investors before making them available to the general public. C-Corporations are typically big name brands.

S-Corporation - This type of structure is fairly common for small and medium size businesses that want both the protection of personal assets and the “pass through” taxation of a partnership structure. An S-Corporation’s profits, losses and tax liability are reported on the personal income tax returns of the owners or shareholders. Thus an S-Corporation avoids the double taxation of a C-Corporation. This model is advantageous for businesses with many owners or shareholders.

How do I decide which tax structure is best for my business?

In our series on deciding which tax structure is best for startups and new businesses we have covered Sole Proprietorships, Limited Liability Companies, Partnerships and Incorporation. We have provided some of the key points, pros and cons of each to help guide new business owners in making the right choice. However, because each business and each entrepreneur is unique it is a good idea to get some professional advice about your new venture.

Tom Bulger, CPA can help you weigh the pros and cons of each type of business structure. Tom believes in entrepreneurship and wants to help you succeed in business. He has been helping people achieve their business goals for over 25 years. Talk to Tom Bulger, CPA today.

Do you have questions about choosing a tax structure for your startup or small business? Post your thoughts and tell us about your new venture in our comment section below.

Check back for our next post on tips for managing your cash flow.

Which type of partnership is the right structure for my business?

In our continuing series on the various tax structures business owners can choose from in this post we will look at the three main types of partnerships and the pros and cons of each.

What is a General Partnership?

A General Partnership is an entity formed by two or more individuals to conduct business or trade. Each partner brings to the table, capitol, labor, skill sets and expertise and each partner shares in both profits and losses associated with the business. Each partner is liable for the business related actions of themselves and the other partners. Income and losses from the partnership must be reported on each partner’s personal income tax return.

Pros of a General Partnership

Simple to set up - A General Partnership does not require a state filing. The Partnership is created when the two entities begin to do business.

Inexpensive to create - While the business entity must obtain any licenses or permits required for the type of business being conducted, under a General Partnership there is no state formation filing hence no formation fee nor ongoing additional state fees or franchise taxes. 

Few organizational requirements - It is advisable for individuals entering into General Partnership to create a framework for how the partnership will be managed and dissolved, but unlike a corporation it is not required. Under a General Partnership there are no annual meeting requirements or issuance of partner interests.

Tax Benefits - Profit and loss sharing by partners may decrease each individuals annual tax burden.

Cons of a General Partnership

Financial Liability- All the partners are personally liable for company debts. All the partner’s personal assets can be seized to pay company debts or satisfy judgments resulting from litigation against the company. All partners are liable for the actions of one another in the course of doing business.

What is a Limited Partnership?

Limited Partnership requires only one individual to act as a General Partner and allows one or more individuals to be Limited Partners. Under this structure at least one General Partner has unlimited liability and the Limited Partners are usually liable only for the amount invested in the business, however this varies by jurisdiction. Limited Partners typically are not involved in the day-to-day management and operation of the business and function much like a silent partner. Limited Partnership structures are beneficial to transient and short-term projects like film production, real estate transactions and estate tax filings. 

Pros of a Limited Partnership

Access to Capitol - The General Partner(s) can generate capitol by bringing in additional Limited Partners.

Retention of Control - Limited Partners are not decision makers, they do not vote or have any authority in the operations or dealings of the business. Limited Partners can be replaced without dissolving the partnership. 

Personal Asset Protection - Limited Partner’s liability is limited to the registered amount invested in the business.

Pass Through Taxation- Limited Partnership’s must file a tax return showing the firms profits, losses, and payments to investors. However, the actual tax burden is not paid by the Limited Partnership but is “passed through” to the General Partner(s) personal income tax burden. 

Cons of a Limited Partnership

Set-up Requirements - Because Limited Partners are essentially investors Limited Partnerships must adhere to the compliancy standards of their jurisdiction. The entity must create a Partnership Agreement in the county where they do business and they must hold annual meetings. 

Liability for General Partners - There is a greater risk to General Partners because they are personally liable for all debts and taxes associated with the firm. Their personal assets can be seized to satisfy debts. If the company goes into bankruptcy or is sued the General Partners are wholly liable.

What is a Limited Liability Partnership?

A Limited Liability Partnership is basically the same as a General Partnership except partners have the benefit of some personal liability protection. Typically a partner is only liable for his or her negligence or malpractice and or the actions of employees under their direct supervision.

Pros of a Limited Liability Partnership

Paperwork and Formal Requirements- Like the other partnership structures a Limited Liability Partnership has fewer restrictions and annual requirements than a corporation.

Flexible Framework - Partners have more flexibility in determining which partners are responsible for each aspect of the day-to-day management and operations of the firm. 

Pass Through Taxation - Like General and Limited a Limited Liability Partnership’s tax burden is passed through to the General Partners tax liability and profits and losses are reported on the General Partners individual income tax return.

Simple Conversion - A Limited Liability Partnership is typically easier to convert to from a General Partnership than to a Limited Liability Company or Corporation.

Partnership Protection - Limited Liability Partners are generally not personally liable for company debts.

Cons of a Limited Liability Partnership

Set-up and Fees - Limited Liability Partnerships must pay a state fee based on how many partners are invested in the firm. In some states Limited Partnerships are only available to certain types of businesses like Accounting and Law firms.

Liability for Limited Partners - Limited Partners are liable for their actions and the actions of employees under their supervision. If a Limited Liability Partner engages in the day-to-day operations and management of the company, they can loose their limited liability protection and in a sense become a General Partner.

Regardless of which type of business entity you choose it is advisable for new business owners and entrepreneurs to get professional advice on how best to move forward in setting up shop. Tom Bulger, CPA can help you determine which tax structure is right for your new venture and the best way to move through the process. Tom Bulger has been helping to create successful small businesses for over 25 years. Give Tom Bulger a call today.