Call Us: 414-545-1890

15    16    17

Hammernik & Associates BBB Business Review

Monthly Archives: June 2014

Milwaukee & Waukesha Counties Accountant On: The Making of Long-Term Customers

How are you and your Milwaukee & Waukesha Counties area small business feeling about 2014 so far?

Now that we’re just about halfway through, it’s a nice time to take stock.

So, really, I’d be interested: How are things going for you so far? Send me a quick email here at Team Dale Hammernik so I can get a feel for it.

Running a small business can be lonely … and I, perhaps obviously, like to be able to offer encouragement along the way, for you, my Milwaukee & Waukesha Counties-area tax accounting clients.

This week’s Note is a simple method to keep your best customers doing more and more business with you throughout the year. As with the above, I’d enjoy hearing your thoughts.

Here we go…

Milwaukee & Waukesha Counties Accountant On: The Making of Long-Term Customers
“The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed.” – Henry Ford

Customers for life are MADE — you don’t just “happen upon” them, in my opinion.

But the fact is, most Milwaukee & Waukesha Counties area small businesses pay too much in chasing new customers and too little in building repeat business with their existing customers.

Which is unfortunate because the satisfied customer will likely purchase again. And they will probably purchase more and purchase something different.

This matters because it definitely costs less to motivate a known customer to purchase again than to acquire a new customer.

In fact, it’s probably most often the case that your (and my) customers are only fickle because a new Milwaukee & Waukesha Counties based competitor is paying more attention to them than you are.

In business-to-business marketing it seems that many companies make the huge mistake of having all their contact with their customers go through the sales representative. This leaves the customers vulnerable to theft if the representative jumps to another employer. It also leaves too much opportunity for negligence on the sales rep’s part.

Regardless of the layers of distribution between you and your customer, it’s a good idea to establish some direct link as an owner or president. The owner of a restaurant can do that by coming around and chatting personally with the customers. The chief executive officer of a large company can do it with a newsletter and maybe a hotline telephone number.

Direct mail is perfect for cutting through these layers (in addition, and on top of email). Here are some of the ways that direct mail can be used to communicate with established customers.

* Introduce new products or services.
* Give advance notice of and explain price or fee increases.
* Offer special discounts or premiums.
* Provide useful information.
* Give recognition to top customers.
* Announce seasonal sales.

And more.

I’ve rarely seen a Milwaukee & Waukesha Counties business that could not increase and improve through increased direct marketing to current customers.

Do not make the mistake of assuming knowledge on the part of the customer.

Do not take shortcuts with existing customers and do not feel that you are boring them by telling the same story repetitively.

If you have quality, service, guarantee, price or other advantages, point them out each and every time you deliver a presentation.

Even as a humble, “non-guru” Milwaukee & Waukesha Counties accountant, I submit to you that American business desperately needs to place a new, higher value on the customer in this economy. Communicate with your customers and you’ll do more business.

I’m grateful for our partnership, and dedicated to your success,

Would you forward this article to a Milwaukee & Waukesha Counties business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Milwaukee & Waukesha Counties families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Dale Hammernik’s 27 Reasons To Purchase Your Own Building

We probably advise our Milwaukee & Waukesha Counties accountant firm’s clients every week on how to handle their businesses, and their finances.

It’s a big part of what we do around here at Team Dale Hammernik, and many clients don’t even realize how much we’re willing and able to help. (And that’s fine, because we are plenty busy — but always willing to talk.)

We can help your Milwaukee & Waukesha Counties small business with tax planning, financial advice, expense analysis, management input — it truly runs the gamut.

One of the conversations we’ve often had over the years revolves around real estate, specifically in the commercial realm. So, I thought I’d put together a little list of reasons why your business might should buy its own building…

Dale Hammernik’s 27 Reasons To Purchase Your Own Building
“The great thing in the world is not so much where we stand, as in what direction we are moving.” – Oliver Wendell Holmes

1.  You won’t have to move unless you really want to.
2.  When your clients associate you with a location, you can keep the location.
3.  You can install anything you think is helpful.
4.  You can decide what maintenance is important and when it is important.
5.  You can set your own temperature controls.
6.  You can finish the interior exactly the way you want.
7.  Some expenses are only justified when you know you have a long-term lease.
8.  You get stable rent.
9.  Your business can pay rent (which is a business expense).
10. You can own the building in a separate LLC, providing limited liability and separate tax accounting.
11. Your LLC can depreciate the building which gives you a tax advantage to offset the rental income.
12. If you hold the building until your heirs inherit it — they will get a step up in cost basis erasing the depreciation.
13. Any interest payment is a deductible expense to the entity owning the building.
14. You can sell the building and reinvest in property without paying capital gains through a 1031 exchange.
15. Owning real estate allows you to profit in any combination of cash flow, appreciation, and reduction of debt.
16. You can get a relatively long-term commercial lease at a reasonable rate.
17. Office buildings are relatively inexpensive right now, making it a good time to buy.
18. There are a number of empty office buildings, making it a good time to buy.
19. A mortgage at today’s rates is the best hedge against inflation.
20. Rents are relatively low now and will rise as interest rates rise.
21. The rental income offers a diversification to your business.
22. Even if you decide to sell or move your business you can keep the rental income.
23. You are not thinking of retiring in the near future.
24. You are not thinking of selling the business in the near future.
25. You can carefully select any other tenants to enhance the neighborhood of your business.
26. You now have an appreciating asset for a fraction of the down payment leveraging your investment.
27. You have sufficient assets or cash flow to make leveraging your investments a risk you can afford.

All that said, there are certain reasons that it may NOT be in your best interests to purchase:

* You do not want to leverage your investments by adding a mortgage to the mix.
* You don’t have the cash flow or capital to purchase the building.
* You are expanding and will likely need a different building in the future.
* You need the money it would take to purchase the property for living expenses.
* You are thinking of retiring soon.

If anything on this list catches your eye, let’s have a strategy session together.

Email or call: (414) 545-1890

Would you forward this article to a Milwaukee & Waukesha Counties business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Milwaukee & Waukesha Counties families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Dale Hammernik Shares Another Big Mistake: No Client Tracking

In this week’s Business Strategy note, I am continuing my little war on bad business, this time about one of the key differentiators I see among my most successful Milwaukee & Waukesha Counties business owner friends.

I hate to say it, but it is an almost obsessive attention to the finer points of sales — frequency, cost-per-sale, “upsells”, etc. Even in “regular” Milwaukee & Waukesha Counties area businesses, these factors can make the difference between ugly red and beautiful black on the P/L reports.

Dale Hammernik Shares Another Big Mistake: No Client Tracking
“One worthwhile task carried to a successful conclusion is worth half-a-hundred half-finished tasks.” – Malcolm Forbes

I’ve written before about the most important pieces of information you should know about your target prospects, but did you know that this same approach is actually even more important for your own customers?

Why? Well, for the simple reason that they’ve already signaled their interest in your products or services by giving you their business. And, that makes this list the most valuable list you can maintain in your Milwaukee & Waukesha Counties area business.

It’s even better, if you’ve got a bead on the following 6 pieces of information, on top of their names …

1. What They’ve Purchased
If you know what your customers purchased in the past, you have a good idea of what they will buy again. (And you won’t waste your time promoting products of little to no interest to them, or to others.)

2. How Often They Purchase
Individuals who buy rarely from you may need additional encouragement — i.e. more marketing. Whereas, consistent customers may not need extra sales pitches, but might benefit from a newsletter or coupon.

3. How Much They Spend (on average)
Why spend precious time pitching products to customers which they can’t afford? It might embarrass your customer, shows your lack of personal interest, and may cause customers to lose interest.

4. The Last Time They Purchased
Have you lost a customer without even knowing it? Who’s still loyal? Who has strayed (and needs to be brought back)?

5. Each Interaction You’ve Had With Them
Documentation is important for obvious reasons. But being able to “recall” previous conversations will make your customer feel important and appreciated.

6. How They Feel About Your Business
Feedback from your customers is the best way to improve your products/services, meet your customers’ needs, and attract more customers.

Obviously, just “remembering” this information is well nigh impossible. Which is why you should seriously consider investing in a “CRM” (Customer Relationship Manager) program. There’s plenty of good ones out there.

I can recommend this one for most Milwaukee & Waukesha Counties small businesses: (Infusionsoft) https://crm.infusionsoft.com/go/20140604emdaff/nfh?utm_content=nfh, but again — the point isn’t *which* one, but that you HAVE one!

Look, I’ll say again: I don’t pretend to be a “guru” … but I see what works for my most successful business owner friends, and I love seeing their numbers grow!

Would you forward this article to a Milwaukee & Waukesha Counties business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Milwaukee & Waukesha Counties families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Dale Hammernik Reveals Another Big Mistake: Ignoring Negative Feedback

I’ve been hitting some common notes the past couple of weeks on behalf of my Milwaukee & Waukesha Counties small business accounting clients:

Grumbling about the economy (and how it never helps us).
Bad advertising.
Bad measurement.

Well, let’s add another to the mix, shall we? Seems like an appropriate way, staring, as we are, down the barrel of the sultry Milwaukee & Waukesha Counties summer, and the hot (and occasionally grumpy) clients that come with it!

Dale Hammernik Reveals Another Big Mistake: Ignoring Negative Feedback
“The key to successful leadership is influence, not authority.” – Kenneth Blanchard

Here’s a certain truth: Every Milwaukee & Waukesha Counties business, no matter how well-managed, will mess up.

You WILL have to deal with dissatisfied, even angry customers from time to time. Sometimes the customer is justified in his complaints … other times he is not, so what are you going to do about it?

Here’s the way many businesses handle it: ignore the problem, and blame the customer.Sure, during the fat 90’s and from 2003-early 2008, this might have been fine (plenty of other business out there, after all) … but in 2014 — in the age of social media, blogs, Yelp, etc., you MUST respond to the feedback you receive.

Shoot, I predict that you’ll find that what you thought was a disaster can be converted to an opportunity.

In fact, there’s oft-cited American Management Association (AMA) research into consumer behavior which indicates that the average satisfied customer tells three people about his experience but the average dissatisfied customer gripes to eleven other people. Negative word-of-mouth advertising is a problem few businesses can afford.

And with Facebook and Twitter (and Instagram, and Yelp and … you get the point), you could probably safely multiply that by a few tens.

So how will you respond to the customer with a complaint? I’ve already spoken about what NOT to do (ignore the customer, ignore the problem).
So, here are some trenches-tested steps. Feel free to post this around your biz:

1) Acknowledge that the person is upset. 
“I can see that you are mad” / “I could see that you’re upset with us.”

2) Make a positive reassuring statement. 
“I want you to know I will get something done about your problem.”

3) Make a sad/glad statement. 
“I’m sorry you had a problem but I’m glad that you called it to my attention.”

4) Ask the magic question: “What will make you happy?” 
You’ll often be quite surprised — in many cases, the dissatisfied customer will ask for something less in settlement than you would freely offer.

5) Make the settlement.
“Mr. Smith I’m truly sorry that you encountered this problem and I’m going to do exactly what you have requested. We want to keep you as a valuable customer!”

Simple as that!

But the sad fact is that by avoiding this simple process (and not training your employees to follow it, or not giving them the proper authority to do so), many Milwaukee & Waukesha Counties area businesses set themselves up for aggravating their most important asset: their clients.

Would you forward this article to a Milwaukee & Waukesha Counties business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Milwaukee & Waukesha Counties families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Milwaukee & Waukesha Counties Accountant Reveals A Big Mistake: Set Advertising Goals; Don’t Measure

Goal setting? Really?

Honestly, this whole ritual of “goal-making” can be very cliche, but look — all of us Milwaukee & Waukesha Counties small business owners still do need little “nudges” to help us actually make changes in our lives.

I see it as my role in your life to not only provide authoritative and actionable advice for your Milwaukee & Waukesha Counties business financial situation, but also to play the role as a friendly “coach”. I get to be someone in your life who says: You can do this. You’re not alone.

I *do* have goals here at Team Dale Hammernik, but I like to think I do them right (don’t we all!).

The difference being that I seek to attach measurable results to these goals — making them a bit more specific to my business and my life. I’ll keep the particulars to myself, but for my own Milwaukee & Waukesha Counties tax and accounting business they fall into some broad categories:

1) Profitability
2) Foundational Financial Growth
3) Marketing Effectiveness

As you set your specific goals for your Milwaukee & Waukesha Counties business, I’d love to be a resource to you. It’s my great hope that our relationship will continue to grow into this summer and beyond. And not just for “business purposes”. We love our referral sources and business owner clients … you’re a family to us!

And now for more specifics about the “measurement” issue I alluded to… after all, as an accountant, I’m a bit of a measurement nut.

Milwaukee & Waukesha Counties Accountant Reveals A Big Mistake: Set Advertising Goals; Don’t Measure
“Right is right, even if everyone is against it; and wrong is wrong, even if everyone is for it.” – William Penn

Many Milwaukee & Waukesha Counties businesses have a wide variety of measurement tools in place for a host of variables, from payroll efficiency to profit margins, to inventory controls. But there’s usually a huge “missed base”, and that’s advertising ROI.

You see, many business owners look at their advertising in terms of “response rates” or “raising awareness”. But it’s hard to measure “awareness”.

And while you *can* measure response rates, it’s actually the wrong way to think about your advertising. A better way to look at small business advertising results is actual Return on Investment (ROI).

Now, this necessitates a couple things:

1) A measurement mechanism.
This can be a coupon/gift certificate with a tracking code. It can be a dedicated phone line or a cookied web address to quantify leads. It almost doesn’t matter HOW you do it … just that you do it.

2) Advertising which incentivizes for a specific response.
This rules out certain forms of “image-building” marketing, unless you’ve got a bunch of dumb money to spend. (Do you? I’ve got some beachfront property to sell you in that case.) Rather, you should focus on “response-oriented” marketing which will help you know if the advertising you’re paying for works.

And I want you to remember this: any Milwaukee & Waukesha Counties media sales person, any ad agency person, any consultant, anyone in your own firm who is anti-direct-response does not have your best interest at heart. The person who opposes having the results measured accurately already knows that the results are inadequate.

Unfortunately, the agency business can be very much a smoke screen and sleight-of-hand business. You’ll be presented with demographic statistics from a given media that are just great. Unfortunately the listeners or readers all lied when they responded to the survey in order to look good and feel good. They inflated their incomes for example.

Print media loves to snow you with its pass-along figures. They’ll talk 100,000 readerships with 20,000 subscribers.

When you have to write out the payroll checks, pay the other bills, pay for all the advertising, pay the taxes and then see what might be left for you, you cannot deposit pass-along statistics or image in the bank account. You can only deposit dollars, which come from real results.

So keep this in mind as you formulate your marketing and RESULTS goals for 2014!

Look, I’ll say again: I don’t pretend to be a “guru”… but I see what works for my Milwaukee & Waukesha Counties clients, and I want you to have the best year you’ve ever had.

Would you forward this article to a Milwaukee & Waukesha Counties business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Milwaukee & Waukesha Counties families and business owners. And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890