Tag Archive | "small businesses"

Good Renters Deserve Better Credit Scores

For many consumers, a confusing part of trying to get a loan is the way that credit begets credit, reported BoombergBusinessweek. Banks want to lend to people who’ve proven to be a good risk. Without a track record, getting a loan can be hard or expensive. A new report from the credit bureau Experian shows that many borrowers could benefit if lenders took rental payments into account.

As lenders bounce back from the Great Recession, they’ve been looking at a broader range of non-traditional data to identify more potential-borrowers who could be a good risk. The idea is some people who don’t have regular credit histories but pay their rent, utilities, and other recurring expenses on-time could a good credit risk. In 2010, Experian bought RentBureau, which tracks apartment rents from large property managers. Using that new data, Experian published an analysis [PDF] that focuses on almost 20,000 people in government-subsidized housing who pay their monthly rent on-time. (Renters who missed payments were already reported to credit bureaus through collections agencies.)

Before adding in rental history, 11 percent of the sample had no credit file at all, which makes it extremely hard to get loans. Once the rental history was added in, 59 percent of that group had prime credit scores, and another 38 percent had “nonprime” scores. Just 3 percent were considered “subprime.”

For the rest of the sample, those who already had a credit score, about two-thirds were considered subprime borrowers to start. When taking rental history into account, 21 percent didn’t see their scores change, and 5 percent saw their scores decrease. The largest group of people—about 74 percent—saw their scores increase. Overall, the credit scores went up an average of 29 points. (Like a FICO score, Experian’s VantageScore is on a scale from 300 to 850.) The report estimates that the credit card interest rates for a borrower who jumped from the “subprime” to “nonprime” would be 4.2 percentage points lower.

While adding new types of data like rent to credit scores means consumers must be vigilant in ensuring a growing number of companies are reporting the data accurately, the Experian’s study makes a compelling case that adding rental history could help people who most need a leg-up.

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5 Key Reasons Projects Fail

Why do some projects succeed and others fail? That’s really the million-dollar question, isn’t it? I think about it all the time. Thankfully, there are concrete answers, reported Entrepreneur.

If you’re frustrated that one of your projects just can’t seem to get off the ground, it might be because these practices aren’t being followed.

1. Set a timeline.
Every project you start must have an end date. Be realistic about how much time a project will take to accomplish. If you budget too little time, you may end up feeling defeated. If you consistently budget too much your time for projects, well, you’ll get a lot less done than you’re capable of.

If you are unsure what steps should be taken to achieve your goal and so can’t create a realistic timeline, start by asking questions. Only when you have a firm grasp about what needs to be done, can you start setting effective project deadlines.

2. Get everyone on the same page.
You can’t do some projects on your own. So assemble a team before starting the project and let every member of the group know what you’ll need from them. If people don’t understand what’s expected of them, they won’t be able to deliver.

Go a step further and be sure that members of the team understand the big picture. What’s the goal of the project? How will you achieve it? Why is each person’s contribution important?

Even before sitting down with the team for a meeting, send an agenda in advance. Never end a meeting with the team without cementing the steps that must be taken next and who’s responsible for them.

3. Hold weekly meetings.
Setting a timeline and clarifying who is responsible for what isn’t enough. You must keep people accountable by regularly checking in with them. I use a project tracker to keep abreast of what everyone is up to. It functions like a scorecard: Everyone is aware of what’s getting done and who’s doing it.

It’s obvious when someone is falling behind. This makes it easy for someone else to step in and volunteer to help out. At our weekly meetings, we review the project tracker and talk about what’s working and what isn’t. Keep your meetings short and don’t veer from the agenda.

4. Key players should make themselves available.
If you want to make sure a project gets done, force everyone who’s taking part to be accessible. Do your part by leading through example. Respond to emails and phone calls promptly. When you have so much going on, it’s easy for something to slip through the cracks. The easiest way to avoid that is to be accessible and respond promptly,

5. Promote transparency.
Whether the news is good or bad, members of your team will work harder when they feel they’re in the know. Do all that you can to encourage the people you work with to take ownership of the project.

Staying on top of many projects isn’t easy, but it’s possible.

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3 Mistakes to Avoid When You Have to Fire an Employee

It’s one of the worst parts about being a leader. Asking someone to leave your company is a part of leadership that many business owners don’t understand how to execute. It is also something most of us try to avoid doing as much as possible. But there is a right way to go through with it and, as head of an organization, it’s your job to know when it’s time to do so, reported Inc.

But before you let another team member go, learn from missteps others have made. Here are three of the worst mistakes you can make when firing an employee.

1. Waiting too long to pull the plug. As a leader, you want to give your employees the ability to grow. Because of this, your natural instinct will be to quickly forgive team members when mistakes are made. You’ll always want to continue giving them more chances to succeed–or to hold yourself accountable.

While coaching is essential, there are times when people won’t fit in your company culture and coaching won’t help. You’ll know when this happens. There are constant arguments and a lack of motivation. Over time you’ll realize that the person isn’t going to fulfill his or her full potential in your company. Once you start seeing traces of this, it’s time to ask that person to leave.

I’ve shadowed countless startup CEOs and one common thread is that they all regret firing employees too late. Not one has told me about regret for letting someone go too early.

Your job is to decide whether the person you hired is making mistakes that you can fix or if he or she is damaging the culture of your company. If it’s the latter, be swift and part ways. Keeping employees who don’t fit with your mission will not only hurt your business but also hurt them in the long run as well.

2. Not Giving Performance Reviews. When your employees make mistakes, sometimes there’s so much on your plate that you shortcut the time to coach them. This is a big problem, because when all the mistakes start piling up, it becomes too much to fix. Small mistakes from team members early on are OK as long as you are making sure they are aware of the error. When you let them know where they are messing up, it gives them a fair chance to fix their performance.

The other problem with not providing feedback is that when teammates are asked to leave, it takes them by surprise. When asked why they were let go, you list the mistakes that they made. The immediate question they will ask you is why you never brought this up sooner. Maybe if you had brought the issue to them when it occurred, they would have had time to fix it. Think of it as a crack in your windshield: The longer you go without addressing it, the worse it will get. Instead, be up front when you’re unhappy with a team member’s performance. If that person is unable to improve, you and the employee will both understand exactly why a firing needs to occur.

3. Taking It Personally. Letting someone go in a startup is different from the way it is in the corporate world. When you fire an employee during the early stages of a company, that person usually will have developed more of a personal friendship with you. You helped build the foundation together. The worker made huge sacrifices and took a lot of risk to join your venture and–in most cases–even took a sharp pay cut.

After all the sacrifices the employee has made, he or she will probably take the firing personally. When you’re in this situation, you’ll have to risk the fact that you’re not just losing a team member but also a friend. It’s difficult not to dwell on how unfortunate the situation is, but in the end you have to come to grips with your decision.

It’s impossible to do something worthwhile and be liked by everyone. Mad competitors, upset customers, and angry previous employees are all a part of being a leader. They aren’t the easiest aspects to deal with, but they present the challenges we need to overcome to become better leaders.

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10 Ways Entrepreneurs Think Differently

Entrepreneurs are a unique breed of people. While some people sit and fantasize about the glamor of being their own boss and creating their own business, those in the thick of business ownership understand that even considering all its rewards, entrepreneurship is a difficult and complicated path, reported Entrepreneur.

The world’s most successful entrepreneurs aren’t the ones who impulsively quit their jobs to chase a get-rich-quick idea. They are the ones with an entrepreneurial mindset — a set of perspectives and values that allow them to achieve greatness.

These 10 perspectives are differentiators you’ll need to have or develop if you’re going to be a successful business owner.

1. Challenges are opportunities. Setbacks, obstacles and challenges are painfully common elements of entrepreneurship. Most people react to these hurdles with stress and pessimism, with an attitude that obstacles are negative experiences that only hinder progress. As an entrepreneur, you encounter so many challenges you simply can’t afford to react this way.

Instead, successful entrepreneurs view challenges as opportunities. Each challenge or setback reveals a key opportunity to grow — either to improve upon an existing weakness or take measures to avoid experiencing a similar setback in the future.

2. Competitors are research subjects. Rather than viewing competitors as a threat, like most people would, entrepreneurs see competitors as enriching opportunities to learn more about their industry and target market. By looking at your competitors’ business models, you can learn what makes yours unique and embellish that uniqueness in your branding and marketing efforts. Studying your competitors’ emphasis on customer experience can teach you how to make yours better.

Your competitors are doing you a favor — they’ve already gathered tons of valuable information. Entrepreneurs realize that it’s up to them to take advantage of it.

3. Everything requires effort. Entrepreneurship is multifaceted and constantly demanding, and there’s no shortage of pitfalls that could disrupt or destroy your business. Successful entrepreneurs are aware of this, and they’re aware that everything — from product development, sales and marketing — requires significant effort to achieve success. Instead of looking for shortcuts, they’re pouring effort into their business at every opportunity, and when they reach one goal, they’re already busy planning another.

4. Perfection is the enemy of progress. It’s a familiar aphorism that nobody understands better than entrepreneurs. Young or inexperienced entrepreneurs might get caught up in chasing their original vision, because original visions are almost invariably “perfect.” But perfection isn’t necessary to run a successful, profitable business.

In fact, perfection is often what stalls progress. The time you spend trying to hammer down those last few details is likely going to end up as time wasted. Instead, spend your efforts on the big picture, and make sure it’s solid.

5. Big things are made from small components. This works for problems as well as solutions. For example, instead of seeing a content-marketing campaign as a quick way to get traffic and new business, entrepreneurs see content marketing in terms of its individual components (blogging, social-media marketing, link building, etc.), each of which has its own advantages and disadvantages. Successful entrepreneurs can break down massive projects, problems and campaigns into smaller, more manageable pieces.

6. Mistakes are healthy. The popular vision of massively successful entrepreneurs such as Steve Jobs or Jeff Bezos illustrates them as infallible leaders. This couldn’t be further from the truth. Successful entrepreneurs, even the rock stars among them, make mistakes often. Furthermore, they aren’t afraid to make mistakes, and they know how to learn from them.

Making mistakes is healthy and normal, and the sooner entrepreneurs realize that, the better. Don’t waste time doing everything you can to avoid mistakes or beat yourself up after making one. Acknowledge your mistakes, figure out what you can do to make up for them, and move on.

7. There is no magic. The super-rich entrepreneurs you read about in the news usually didn’t get there because they randomly stumbled upon a great idea. They got there because they poured years of effort and passion into a good idea, and eventually their efforts paid off.

You can’t become an entrepreneur expecting there to be a miracle, or some kind of instant, magical rise to the top because your idea was revolutionary. Even the best ideas in the world require patience, skill and endless effort to earn that level of success. The world’s best entrepreneurs realize this. Waiting for your idea to do the work on its own, or waiting for some unseen element to carry you to success can only result in disaster.

8. Outside perspective is invaluable. Entrepreneurs need to be good communicators, and that means actively listening to those with different ideas and opinions. It’s easy for us to get trapped in one mode of thinking.

Many business owners keep their business models and directives too rigid, ultimately restricting their ability to grow and leading to failure. Successful entrepreneurs, on the other hand, are constantly searching for individuals and experiences that will challenge their way of thinking and lead them to see things from a new perspective.

9. Discipline is a prerequisite. To most people, discipline is something extra. It takes extra thought and effort to exercise, wake up on time or do anything other than spend leisure time. To successful entrepreneurs, discipline is normal. It’s a prerequisite that carries into all aspects of their lives.

You don’t have to be a regimented military-style leader to be disciplined, but you do have to know what you want and be prepared to do whatever it takes to get it.

10. Entrepreneurship is a lifestyle. Entrepreneurs wake up as entrepreneurs, go to work as entrepreneurs, come home as entrepreneurs and go to bed as entrepreneurs. There is no nine to five. There is no “work life” and “home life.”

The advantage of this is that you have total control over your business and your professional choices, including what you do for it. The (possible) disadvantage of this is that you carry your business with you everywhere you go. Entrepreneurship becomes your work and your life, and you need to be prepared for that if you’re going to survive the lifestyle.

Being a successful entrepreneur isn’t about being born with a specific mindset, it’s about being prepared for the challenges that await you.

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3 Tips to Fill ‘Undesirable’ Roles

In general, no position is impossible to fill because there are different types of people who would be happy in different types of roles. A task or role that is tedious to one person can be a gratifying job for someone else, reported Fox Business.

Managers can’t think about whether or not they’d want the job, but rather who would want to do the job. While it may take more work to find the right person to fill an “undesirable” role, there are three main selling points for any position:

The company. Hiring managers get so caught up trying to sell the role itself, they forget to sell the entire package the company has to offer. Show off the workplace culture with a company video during the interview process. Share employee perks or attractive benefits package. Talk about the team camaraderie, training or mentorship programs, etc. Better yet, have someone come in and speak to the company’s career progression opportunities. Get creative in how to present the pros to outweigh the cons.

The supervisor. At the end of the day, the right manager can make a crummy job enjoyable. Make sure the manager is the best fit for that particular role, because as the saying goes, people join companies, but they quit managers. It will be far easier to sell a role that is accompanied by effective management.

Work involved. As desperate as a hiring manager may get, they have to hold off for the right hire and not sugarcoat the position for anyone that seems slightly interested. It’s important to find people who want to be there. Too often managers settle on the wrong people. The consequence is poor service, bad results and at the end of the day…usually turnover. Honesty when explaining the position and what it entails is important for long-term success in the role. If not, the hiring manager is simply setting the candidate up for failure, as well as the company, because the role will be vacant again in no time. Are the hours flexible? Does it provide autonomy? Companies should consider adjusting the job description to include some position-focused perks if the work itself isn’t exciting.

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What Does It Take To Win Back A Customer?

It can happen to any business of any size: A customer isn’t happy with your product or service and decides to express his or her displeasure, and once this happens, it’s pretty tough to win that customer back, reported Fox Business.

“It’s a real challenge [to earn back] trust and loyalty where a disappointed customer is concerned,” said Danny Rippon, chief solutions officer at customer engagement solutions provider Thunderhead.com. “The ideal scenario is to avoid disappointing customers in the first place, [but sometimes] there are gaps in what customers expect and what companies are able to deliver.”

According to recent research by Thunderhead, 1 in 5 customers will stop trusting a company after one bad experience, and 25 percent will switch brands completely. Moreover, nearly one-third of customers will share a bad experience on social media or other public forum, which could potentially reach hundreds of thousands of other consumers. [Customer Service 2.0: Satisfying Customers in the Digital Age]

As Rippon said, it’s always better to avoid disappointments whenever possible, but the occasional negative experience is more or less unavoidable. So what does it take to persuade a customer to give you another chance? Personalized, targeted engagement is the best place to start.

“The key thing you need to do to win back customers is to put the value back into the relationship,” Rippon told Business News Daily. “Sometimes things can go wrong even with your best intentions. As long as you ensure that all communication is timely, relevant and personalized to the individual who had the negative experience, you should still be able to recover the situation.”

Thunderhead’s research found that waiting too long or sending out platitudes when addressing an upset customer will only make matters worse. The vast majority of customers (93 percent) indicated that they wouldn’t change their opinion about a company if it didn’t act quickly enough to remedy a bad experience, and 82 percent said they were disappointed by companies who take a “one-size-fits-all” approach to customer service.

Rippon said that valuable customer relationships are only possible when departmental siloes are taken down, and the customer is truly placed at the center of your business. When a customer has a bad experience with one department of your company, and you respond based only on that isolated incident, you’re failing to take that customer’s individual journey with your company into account.

“Remove the organizational barriers that prevent offering value-based interactions,” Rippon said. “Being relevant and having a customer engagement strategy [should be] a broad-level mandate.”

Using the person’s overall experience with your brand can help you offer a more meaningful response and/or solution. For example, the information you serve to a customer who has done research on your website or made a purchase in the past is very different from the content you’d give to someone who’s visiting your website for the first time.

“It’s about having value all the time,” Rippon said. “If you add value for a customer, they’ll rarely leave you.”

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