Bad customers are costing you more than you realize.  You already know that some customers are less profitable and more difficult to serve than others.  Accepting lower margins on some accounts and making higher margins on others seems reasonable, especially if your sales are slow. If your business has limitless resources and you have unlimited patience, then you can afford this overall profitable mix of good and bad customers.

Here are some types of bad customers to get read of:

1. Slow-paying customers:  These customers consistently pay late and only after a series of follow-ups calls
2. Customers with constantly-changing and ever-expanding needs:  These folks have full-service expectations with limited-service budgets, and are typically the bane of service firms.
3. Price-sensitive, demanding customers:  You offered incentives to these customers to attract new business and hope to nurture their accounts to targeted levels of profitability.  Or you accepted lower prices because you were convinced that these customers would require fewer resources or accept no-frills product lines.  Instead, these customers resisted standard pricing and insisted on high service levels and numerous product features.
4. Conniving Customers:  These customers seem to have legitimate complaints but they misrepresent problems to extract restitution in the form of full refunds or heavy discounts.

Holding onto a bad customer prevents you from serving the good ones.  Therefore cut your losses early.

Seasoned professionals know this little known fact.  Valuing a business is not completely a science neither is it completely an art.  While there are many known and time tested method of valuing businesses, at the end of the day there are a lot of subjective elements that play a huge part in the valuation process.  Several sophisticated methods can be used to estimate potential business valuations but finally it all come down to what the buyers are willing to pay.

Now let us look at the few methods of business valuation that are out there.  One of the common approaches to valuing a business is the income approach.  Under this approach the valuation is based on future discounted income of the company.  This method relies on the accuracy of cash flow projections and will depend on the market conditions that will prevail.  While a financial investor can feel good about knowing the returns the business will provide, in some industries this can be hard to predict.  How many of us would have predicted the current financial meltdown we are experiencing and its impact on income & cash flows?

Click here to continue reading.

Online Directories are the perfect place for a small business to gain exposure to investors, partners and potential employees.  But as always there “risks that can hurt the company’s reputation.”

Many online directories such as crunchbase.com and wikipedia are great platform for small business to get their message out but small businesses should check monthly to ensure the information is accurate.

An easy way is to set up alerts from the directory and additional alerts such as Google Alerts.  Therefore every time something is added or removed from the listing the small business will receive an email.

Hurry and take advantage of all the free exposure and free advertising for your small business today!

Thinking for buying a business? Why not start your own? If you think it will be too expensive to “hit the ground running”, thing again. Emily Schmitt from BusinessWeek “discusses his favorites for those looking to start a business on the cheap.” From preparing business plans to invoicing Emily has you covered!