In 1996, Richard Carlson wrote a little self-help book titled “Don’t Sweat the Small Stuff … and It’s All Small Stuff.” While the message may be fine for your emotional life — hey, I’m a great believer in staying cool about the little things — I’m not so sure it’s appropriate when applied to managing a small business, especially in areas like compliance, cash flow and customer service.
For example, a 2010 article from Inc.com strongly recommended that the small business owner “sweat the small stuff” and pay close attention to compliance with government regulations. While this article dealt mainly with policies related to human resources, you also want to ensure that you’re crossing your t’s and dotting your i’s when it comes to income and sales tax accounting.
Whether it’s the IRS, the New York State Department of Taxation and Finance or the Department of Labor, it’s imperative that you know your responsibilities, your deadlines and the process to follow in order to meet legal requirements, because the government guys don’t just get grumpy, they will slap you with penalties and interest. A case in point is the quarterly sales tax return. I have one client who files late almost every quarter, and each time he has to add on a $50 penalty that he could avoid just by setting up some sort of reminder system.
Cash flow management is another area where the small business owner must keep an eye out. It’s not enough to stick all your receipts in a drawer and haul them in a bag to your accountant in April. You should track your sales and expenses at least once a month, and then look to the future to see what other bills may be coming up.
It’s just like your household budget; you can’t spend more than your salary or you’ll fall behind. And you have to be even more careful in your business, since those revenues aren’t as predictable as your paycheck. You need to keep a close eye on the movement of your money in and out and set aside some of your profits for income taxes and unexpected expenses.
I just went through this process with one of my new clients to see if she could afford to hire an employee. When we created monthly profit-and-loss statements for her first six months in business, she was shocked to discover she was actually losing money because she was paying for some bills with her personal account.
Along the same lines with customer service, I heard a story last summer about a food establishment that was trying to control costs by charging customers a small amount if they asked for anything extra with their meal — tomatoes, an extra dollop of mayo, an additional slice of cheese, etc. Customers found this very irritating. Yet at the same time, the restaurant allowed unlimited refills on soda, which is not a common or expected practice. For about the same amount, the owner could have saved money by eliminating that freebie and most customers wouldn’t even notice, rather than nickel-and-diming them over the condiments and having them leave the restaurant grumbling.
You can change a customer’s perception of your business for the better just by implementing some small changes. Pay attention to products or services they ask if you provide. If enough people are requesting something specific, it may be worth your while to add that on. Or, if you’re hearing frequent complaints about something you don’t think is important, remember that a happy customer may tell two or three people about a positive experience, but an unhappy one will tell everyone they know. In these days of social media, that may be hundreds.
It all comes down to keeping a close eye on your business practices across the board. Remember, think small.
Sarah O’Connell is a certified business advisor with the New York State Small Business Development Center at Jefferson Community College. She is a former small business owner and lifelong Northern New York resident. Contact her at email@example.com. Her column appears bi-monthly in NNY Business.