Most business owners accept those business axioms. Unfortunately, they’re wrong. “At best those beliefs are half-truths and at worst they’re pure fiction,” says Ed Hess, a business professor at the University of Virginia and author of the new book Grow to Greatness: Smart Growth for Entrepreneurial Businesses (Stanford University Press, 2012). “Growth can be good and growth can be bad.”

Basically, Hess argues that everything you know about growth is probably wrong. Yikes! So how can you tell the difference between “good growth” and “bad growth”?

Here are six surprising truths about what growth is really about:

Truth #1: Growth is change (and change isn’t easy). There are limits to how quickly any person or business can deal with change. Growth forces you to install more procedures, controls and measurements which must then be taught to employees. Growth also forces you to change what you do. Sustainable growth requires the right leadership, the right environment (culture) and the right processes.

Truth #2: Growth is evolutionary. Your business model and value proposition must pivot to keep up with change.  Anticipating and responding to constant changes can require making some difficult decisions along the way. For example, businesses that grow rapidly must often change management.

Are you prepared for something like that?  Managers who operate effectively when the business is just starting out might not be able to adjust when things get more complex. The job simply outgrows their skills. This is yet another important factor that you must be prepared to deal with as you think about growing your business.

Truth #3: Growth requires continuous learning and improvement. You and your employees must be constantly open to learning, adapting, experimenting and improving. No matter how big you get or want to get, continuous improvement is required.  “In my research of high growth companies, I found that one factor they all share is a ‘be better’ DNA,” says Hess.

Improving your product or service, how you deliver it to your customers, and every customer touch point is necessary to stay in business and to grow your business. The good news is that continuous improvements lead to more loyal customers who can be your best advertising.

Truth #4: Growth requires focus and setting priorities. Owners of growing businesses must learn to focus on what is most compelling that makes the business different from the competition. But every small business has limited resources and time, so to grow successfully you must identify and spend your time on only the key areas that can drive success.

And keep in mind that in order to set priorities wisely, you need  concrete and useful data about your business, and you must clearly communicate your priorities to others.

Truth #5: Growth may require a new recipe. Growth requires implementing processes, which are like recipes for baking a cake. They are the step-by-step instructions for how to do something and are necessary to minimize mistakes, install quality standards and deliver products and services on time.

“Processes are the ‘how’ part of doing business,” says Hess. “As businesses grow, entrepreneurs lose the ability to be hands-on with everything. There’s simply too much to do. So, the challenge is to increase the probability that others will do what you want done. To accomplish this you need processes.”

Truth #6: Growth creates new risks. Growth stresses people, processes, quality and finances. It can dilute your culture and the value you deliver to customers. Understanding these risks is critical to managing the pace of growth and preventing it from overwhelming you.

“To get a better handle on growth risks, consider how your position in the marketplace will change as you get bigger,” says Hess. You will probably enter a new competitive space, facing bigger and better competitors than before. Those new competitors may be better capitalized than you and able to engage in price competition, driving down your margins.

The good news is that you can minimize risks by planning for growth, pacing growth, and establishing controls and processes ahead of time. By simply thinking about what might go wrong, you’ll be ahead of the growth game. 

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The good news is this: Strategy is an area where small firms and startup entrepreneurs have  an opportunity to out-think their big business cousins. And it starts by simply grasping what strategy really is – and is not.

While there’s no official “strategy playbook” or universally-accepted definition, my favorite description of strategy comes from Richard Rumelt, a professor at UCLA Anderson School of Management who is considered one of the world’s top authorities on business strategy. “Unlike a stand-alone decision or a goal,” says Rumelt, “a strategy is a coherent set of analyses, concepts, policies, arguments and actions that respond to a high-stakes challenge.”

High stakes indeed.  It’s your business on the line, after all. But if you were to pick just one word to get at the essence of strategy, it would be “action.” Define all the vision, values, goals, customer pain points and revenue opportunities you want.  Those are the “what” of the situation. A strategy is your “how,” and that requires action.  Successful entrepreneurs understand this because they’ve not only seen a need, they’ve articulated a specific, rationale series of activities to satisfy that need and achieve their goals.

Still, the true nature of strategy remains murky in today’s business world. To help clarify, here are six secrets to avoiding common pitfalls and creating a successful strategy for your small business:

Secret #1: Goals are not strategy. This might sound simple, but some of the best and brightest in business fail to recognize this every day. You might, for example, have specific revenue goals for your business, or a desire to be “biggest” or “best” at whatever you do in your area. But how will you make that happen?  You need to know the “pivot points” on which to focus your efforts.

Secret #2: Ya gotta do something different. If your “strategy” is exactly the same as everyone else’s, how do you expect to succeed? The actions that you choose to focus on as part of your strategy must – somehow – involve doing things differently than your competitors. That might involve doing different things; or the same things differently. To beat the competition, you need a sustainable difference.

Secret #3: Strategy also means choosing what not to do.  Strategy is about making choices. In short, you can’t do it all, so you need to pick what’s important. Some business owners find it easier to start the strategy-development process by first deciding what types of activities their business will avoid, either because those activities just don’t fit with the vision and goals, or because others already use them.

Secret #4: Good strategies are rarely obvious. Don’t expect strategy to come easily.  If it’s obvious, others have probably done it already. You may need to summon all of your creativity, insight and innovation in order to find the best strategic fit for your business.  Your differences need not be radical. Even subtle, yet distinctive differences can magnify your actions and lead to success.

Secret #5:  Your strategy is an ecosystem. A strategy isn’t one thing or one activity. It’s many activities – some day-to-day, some less frequent – customized to fit into and implement your strategy. And just as in nature’s ecosystems, each part plays an important role in preserving the system (your strategy) as a whole.

Secret #6: Strategy can be lost – and regained.  Businesses both large and small lose track of their strategies all the time. It happens slowly, as successful companies lose focus and drift into incremental approaches that were never part of the core. That’s when your business needs to regroup and reexamine its strategy to see if it’s still the right one. You may simply want to renew the original, or find a new one. Either way, it’s all about action.

Bonus Secret: “Good Strategy/Bad Strategy” (Crown Business, 2011) by Richard Rumelt is a terrific read on this topic.

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1)      Planning Ahead:  Small business owners who managed to grow in the face of economic weakness were adept at planning for what might go wrong, rather than simply reacting to trouble. When times were good, these well-prepared biz owners squirreled away cash reserves and opened credit lines that helped them weather tough times without having to make cutbacks.  In contrast, owners with declining revenues found themselves madly rushing to slash expenses as difficulties mounted.

2)      Borrowing Strategically:  Growing businesses understand that borrowing can be a good thing (especially since interest is tax deductible) if the money is put to good business use.  And the use that has paid off best for growth firms is R&D. About 58% of high-growth small business owners report that R&D type investments yielded the most positive returns. On the other hand, borrowing to open new offices, build production facilities or add new capabilities was more likely to correlate with a DROP than an increase in sales. Likewise, borrowing to add staff was generally a money-losing endeavor.

3)      Sharpening Management Skills: Professional development also leads to more income. Business owners who improved their skills at strategic planning and money management, for example, had a better chance of achieving revenue growth than those who didn’t.  But the most compelling results came from those who got better at hiring the right people. Team building skills, it turns out, are great for boosting a bottom line.

4)      Getting Good Advice:  Small biz owners have always relied on advice from friends and fellow business owners. That never changes.  But the best of them also make sure they plug into a savvy accountant or other financial advisors to provide the kind of professional fiscal advice that every business needs, no matter what size.  For example, 68% of businesses with rising revenues sought out financial advisors, while only 51% of those with declining revenues took that step.  

5)      Balancing Business and Life: Revenue-boosting business owners tend not to be all-consumed by their businesses.  They’ve learned to balance involvement with family, friends and their communities.  In short, they run their businesses – not the other way around.  Conversely, business owners whose revenues decline tended to be more fiercely independent and obsessed with their companies at the expense of other parts of their lives.

6)      Sharing Vision:  The Guardian study also found a strong correlation between success (in terms of revenue growth) and business owners who were strong leaders and adept at sharing their vision with employees, colleagues and others.  In addition, it was critical for business owners to demonstrate commitment to the business and inspire teams to perform at their highest level.

If you’re not among the ranks of revenue risers, take these six differentiators to heart as you plan your year ahead. By following in the footsteps of success, you’ll have a better chance of increasing revenues no matter what’s happening in the economy around you.

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What do you do then? Many businesses already have an established yes or no answer. But if your past response to discount requests has been to fire back a firm “no” or simply offer a price break, there’s definitely a better way, says Robert Sobel, a customer loyalty expert and co-author of the book “Power Questions” (Willey, 2012). By simply asking the right questions, you can gain valuable intelligence on why the customer is seeking a discount, and thus have ammunition that helps you preserve your profitability.

There are four types of discount seekers. The first are in genuine financial trouble and really might need a break. Others simply want to negotiate the lowest price on absolutely everything, and some just like to feel like you’ve given them a deal. A fourth type of discount seeker likes to complain about how much things cost, no matter what.

Asking the right questions helps you discover what kind of discount seeker you are dealing with, and how to respond. Here are the 10 key discount-diverting questions, and when to ask them (note the questions are phrased as if you are the one asking):

1. To kick start the conversation: “Before I respond, would you mind if I asked you a couple of questions so I can better understand your request?”
2. To dig deeper: “Occasionally a client requests a discount, and I find I am able to be more helpful if I understand why they’re asking for one. Can you tell me why you think the price is too high and a reduction is warranted?”
3. To size up your competition: “I know you are talking to other service providers about this project. Do you feel my price is dramatically out of line with the market?”
4. To say “no” while identifying possible terms for a positive negotiation: “I am able to reduce the price when the scope and breadth of the proposal are also cut back. Would you like me to prepare an option for you that would do that?”
5. Or you might also say, “We are able to reduce price in exchange for terms and conditions that help lower our risk and long-term cost of doing business. Would you like me to develop a proposal for a long-term supply arrangement with built-in discounts for guaranteed volume levels?”
6. To learn more about your client’s buying process: “Where will the budget come from for this? Who can give this final approval?”
7. To accentuate the value you are offering and clarify what is most important to the client: “I’m not sure we had a thorough discussion about the benefits you expect from this. Can we review those, as you see them?” Or you might ask, “What parts of this proposal are most important to you? Which aspects of it do you find less valuable?”
8. To differentiate yourself from the competition: “Would you mind if I briefly reviewed several aspects of my proposal that I think represent value above and beyond what our competitors offer? I’m not sure I articulated these very well.”
9. To tie your proposal to your client’s higher-level goals: “Can we review one more time what your goals are here? What are you hoping to accomplish?”
10. To go toe to toe: “Do you give your own customers discounts?” And if they say “Yes,” you respond, “That’s why you need me.” And if they say “No,” you respond, “So why should I?”

The goal, of course, is to preserve and strengthen the customer relationship —assuming it’s a customer you’d like to keep. If you’ve priced your services properly, you probably cannot afford to discount. But if you simply say ‘No,’ the customer might leave and never return.

By using a question approach, you can delve deeper into the situation and discover the customer’s true needs. You might find another way to show them the value they want. In the long term that will be viewed much more positively than a one-time discount and is a better option than refusing the request out of hand.

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Everything you do should be subject to scrutiny and revision, including your mission statement, business and marketing plans, budget, sales and expense expectations and more, says business makeover specialist Patricia Sigmon, president of LPS Consulting (www.lpsconsulting.com), which creates profit-focused tech solutions for small businesses.

“If you’ve held on to that large office waiting for things to pick up, kept an extra car, maintained a larger-than-needed staff, have too many cell phones, or whatever, it’s time to start a ‘new business,’ scrap what you can, and feel the relief,” says Sigmon, author of Six Steps to Creating Profit: A Guide for Small and Mid-sized Service-Based Businesses (Wiley).

Make 2012 about major regrouping, major renovation and creating a brighter, less stressful view of the road ahead – your new normal. Here are seven of Sigmon’s suggestions for giving your business a profit makeover:

1. “Fire” unprofitable customers.

Sometimes, the highest-maintenance, most time-consuming customers you have are the ones who pay you the least. Analyze the profit margin or lack of profit margin that each customer or perhaps customer segment produces. Stop pursuing customers who are not helping you be profitable – period.

2. Reward your best customers.

Look at which customers are giving you the most profit, and coddle them, woo them, don’t lose them! Offer them frequent buyer rewards. Send them a small gift at their one-year anniversary. Give them a random call every few months to “check in,” thank them, and ask what else they might need. Treat them like gold.

3. Start relationships.

This coming year, it’s time to overhaul your sales behavior. Turn all one-time sales efforts into relationship sales. Start monthly maintenance plans, suggest auxiliary services, sell complementary products, or offer retainer plans covering 50-100 labor hours, for example.

4. Erase those expense lines.

Reduce your operating expense budget to the lowest possible number. If that means selling your car or closing an office, so be it. You can’t build a new profit base when you are still using yesterday’s expense model. Go through your expenses line by line and get rid of everything you can live without.

5. Outsource, outsource, outsource.

Whatever type of skill or service you need, think hard before hiring a new employee or keeping an old employee. Look at each department or each person when you are trying to manage costs. Can you eliminate positions (perhaps through attrition), combine jobs, delete processes, and outsource tasks? Outsource exactly what you need for the right amount of time and the right amount of money.

6. Update your networking.

From blogs to Twitter to LinkedIn to Facebook, invest in the online and social media presence you need to compete now. Businesses that don’t leverage social networking will be left behind. Jumpstart new relationships in 2012 with forum building. Update all your sites. Keep your online relationships fresh and dynamic with news, blogs, newsletters, tips, and surveys. Find an online forum in your industry and become an active contributor.

7. Take your office with you.

With cloud technology, you are no longer bound to a desk. Log onto some new interactive cloud-based systems that can help you do your business anywhere. Make sure to you have Internet connections on all of your devices. Everything you once needed to do in your own office can now be done remotely. Best of all, when your employees are sharing files in the cloud, it makes for a much more cohesive, connected team.

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1. Know your own value. While you can’t know everything the other party might want from you, be sure to understand what your offer or position can do for them. This means researching all the potential benefits and ways that your idea, product and/or service could help the other party, whether it is solve a problem, boost profits or simply make their life or business more convenient and enjoyable.
2. Pursue personal relations. Don’t be afraid to show the other party who you are as an individual – what you can do, where your values is and how the deal at hand will benefit everyone. You learn about them; they learn about you. Both parties must feel a synergy; only then can you forge a mutually beneficial relationship. When deals close quickly and easily it’s often because people have come to know and trust each other.
3. Get buy-in on your vision. Getting others on board with your plan can be challenging, especially when there are many people involved and/or there is much at stake. A critical step in artful deal making is to articulate your vision of the outcome so the other side desires the very same outcome.   Make the “what’s in it for me” factor crystal clear to the other party as you present your position.
4. Be humble, fair and honest. You have to be humble, but firm, to effectively broker a deal. There’s a fine line between the two, particularly when you’re dealing with people who’ve already achieved success.  Always respect the positions of the other people involved in your negotiations, no matter how badly, or not, you want the deal. It’s critical to be fair and honest about the negotiation and to keep your intentions pure. You need to let people know you have the ability and desire to deliver what you say you will. You also need to showcase with quantifiable examples that you put 100% effort behind everything.  In short, your goal is humility with backbone. It’s a tricky but essential combination.
5. Apply a little finesse. Blunt force doesn’t work in any negotiation. No matter how large or small, almost every deal takes finesse, which is where skill and natural ability meet. This is where you get to have fun and allow your personality to shine. It means being able to explore different angles.  It’s problem solving with a twist. It’s poise and diplomacy. In the end, when finesse comes into play, the parties tend to genuinely like each other and all sides look for ways to make sure the deal goes through. For the best deal makers in business, finesse often comes naturally.  If it doesn’t for you, try to develop it, let it flow and have fun trying it.
6. Show confidence. It helps to add a dash of swagger as long as you are careful not to appear arrogant (remember humble from above). If finesse is about problem solving and outside-the-box thinking, then swagger is about having a commanding and authoritative disposition and demeanor but without being pretentious or arrogant. It’s about knowing how good you are and hinting at what your business is capable of without bragging. In a deal-making situation, try to exude confidence, success and fearlessness.

Master these six essentials and you’ll be ready to successfully negotiate just about anything for yourself, or your business. Remember, though, that the best negotiating skills are developed over time and with practice, so don’t despair if things don’t all go your way. You may have to stumble a few times, but just get back up and go at it again.   

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Reznick has built its reputation working with companies through challenging times, helping analyze opportunities and tap into tax savings. Castelli says his group – which includes many former entrepreneurs – sees business owners making the same mistakes that are often avoidable.  

Based on Reznick’s years of experience helping businesses grow from the inside, here are 10 secrets for achieving growth even in a poor economy: 

1. Grow to survive – Many small or local businesses assume it’s best to reduce offerings to survive tough times. While this seems intuitive, sometimes the answer is to do just the opposite – to grow. Before cutting back and shrinking your business, consider first whether additional funding might help.
2. Check your ego – You know your business inside and out, but that doesn’t make you an expert at running it. Smart business owners know what they don’t know. Don’t be afraid to ask for advice and then, take it.
3. Remember your first fans – Many entrepreneurs seem to forget who helped them get started. If you have investors, keep them apprised of what’s going on. Good communication is key.  A good investor group can provide mentoring and other resources, so keep them involved.  
4. Share your knowledge – In today’s business world, success and influence are in the hands of those who share their ideas and information. Yes, you might lose a little competitive edge by sharing your secrets.  But you will gain influence, and possibly success. So when you’ve found a great tool or solution, or gained insight, tweet it, blog about it, author an article, post it to Facebook.   
5. Hire someone to watch your money – Lack of strong accounting and finance can be the only thing keeping you from reaching your financial goals. Find well qualified people who share your vision and then step back and take their advice.  
6. Know when to persevere – Stick to your mission. Many would-be success stories end prematurely because they give up when challenges mount. Don’t let hurdles stop you. Arm yourself with market knowledge and an expert team and push through.
7. But recognize when to change direction – Still, there are times you may need to change direction or call it day, and having the courage to do so can be liberating. You may end up with a clearer picture of what will or won’t work.
8. Keep cash on hand – One of the biggest mistakes growing businesses make is to run out of cash. While the sun is still shining on your business or before your financial picture has a chance to turn sour, meet with lenders and/or landlords proactively to see if there are opportunities to restructure debt, payment terms, etc. Having cash on hand is critical for staying afloat and continuing to grow.
9. Get more when you have more – Don’t wait until cash balances get low to secure more funding. The best time to get more is when you have more. Securing a line of credit while you still have money in the bank gives you the ability to negotiate a larger line and better terms. It also gives you the ability to make payroll during slow times and to have access to cash as needed. In addition, it gives you an opportunity to develop a business relationship with a bank. Waiting until you really need money takes away your negotiating power and leaves you at the mercy of the lender.  
10. Sell when you get the chance – Many business owners miss, or worse – pass up – incredible chances to sell their company because they are not prepared to adequately evaluate the opportunity. Know where you stand in the marketplace at all times.  That includes what your potential is, and what it will take to reach your potential.  That way, when opportunity knocks, you’ll know what to do.

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According to Joseph Wells, a CPA and founder of the Association of Certified Fraud Examiners, these three major risk factors can lead to fraud in a small business:

1)    Inadequate screening of employees before they are hired. Doing background checks is advised.

2)    Inadequate financial controls around record-keeping, bank accounts and how cash is handled.

3)    Too much trust. Sadly, the very thing that makes a small business a nice place to work also helps thieves succeed.

Some common back office fraud schemes include billing for non-existent goods or services, creating fake vendors, writing checks to dummy businesses or taking kickbacks from vendors.

A recent survey of small business owners by TD Bank, one of America’s 10 largest financial institutions, found that 75 percent are taking at least some steps to protect themselves against financial fraud.  But most aren’t doing nearly enough.

“It pays to be vigilant,” says Robert Dunlop, who heads corporate security and investigations for TD Bank. “Given the influx of new technologies available to small business owners, it’s important to learn about the latest techniques used by criminals, and to be more diligent in defending against fraud.”

Here are some tips for protecting your business against financial fraud:

Employ financial checks and balances.  Perform an internal review of company finances monthly. Make sure payment amounts match all invoices, and check for missing documents.  Running random audits or having a third party audit the books yearly shows employees that you are serious about fraud and deters would-be thieves.

Protect computer systems and practice web awareness.  Being complacent about cyber protection has cost many small companies dearly.  Every computer should have the latest firewalls and anti-virus software. Beware of “phishing” schemes that try to obtain confidential information from you or your employees. These usually take the form of an email that appears to be from a financial institution or service provider, but is fraudulent.  While most are easy to spot, some contain enticing headlines or appear to come from a legitimate address.

Guard sensitive hard copy documents, too.  The digital realm isn’t the only place your information is at risk.  Employees and others can steal your mail, credit card information or checks.  Printed financial statements and other sensitive papers should be shredded or stored securely.  Most financial institutions now let you opt out of receiving paper statements entirely, so that’s something to consider.

Even innocent photocopiers pose risk. “Most copiers built since 2002 contain a hard drive that stores every image scanned, copied or emailed. When you sell or upgrade your copier, the machine is usually reconditioned, but often the hard drive is left intact,” says Dunlop. Once the machine is resold, anyone can simply pop out the hard drive and access confidential information such as income tax and bank records, social security numbers, and medical records.

Use secure online banking.  Online banking is a secure way to manage small business finances. Most major banks now provide numerous levels of online security. Benefits include 24/7 access to real-time information, account transfers and payment management. You can easily schedule and manage payments and will have an audit trail of all transactions.  Be sure to check account activity regularly. Having instant access to payment histories helps you monitor spending for any discrepancies.  

Get proper insurance. Crime and fraud-related losses generally aren’t covered by property insurance policies, so it’s important to protect money losses from workplace fraud.  “Fidelity Insurance” protects your business against criminal acts such as robbery, embezzlement, forgery and credit card fraud. Liabilities secured under this type of insurance usually include money loss coverage (burglary or theft) and employee dishonesty (embezzlement and forgery).

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

“Nobody sets out to be a drainer,” notes Jon Gordon, a business “attitude” consultant who works with businesses, professional sports teams, universities and other organizations. “It’s just that some people regularly, and inadvertently, exhibit energy-draining behaviors. Many business owners allow it to continue, or are themselves guilty of the same behavior. And over time, the entire culture of the business becomes poisoned.”

Here are the top business energy drains, and what you can do to fix them:

1)    Squelch negativity:  There’s nothing more draining than boss, business owner or employee who’s constantly negative. Don’t let negativity be your go-to response. Respond constructively when others offer ideas.  Even if the suggestions are off the mark, hear them out. An encouraging attitude keeps creative juices flowing. Remember, as pessimism rises, performance drops.

2)    Halt the complain train: The temptation to whine can be powerful, but whining is infectious and before you know it, everyone is complaining about something. Instead, push for solutions. When you hear a complaint, ask the complainer how it should be fixed. Turn your employees into problem solvers instead of problem sharers.

3)    Ban critical email and voicemail: Nine times out of ten, the critical email you send ends of sounding harsher to the other person than you ever intended. Such it up and conduct your toughest talks in person. You’ll be able to ensure that your tone is not misinterpreted and have a constructive dialog with the other person.

4)    Avoid the Monday morning load-up: Don’t overwhelm your employees with a mountain of emails or lengthy to-do lists before the week is even underway.  Boil down and bundle your orders, and parse them out in steps. Flag the ones you consider most important so others know where to start first.

5)    Spot the busy bee bamboozle:  Don’t confuse activity with progress.  And that applies to you as well as your employees. Just getting through daily routines can make anyone appear busy. But that’s not progress. Set goals and hold yourself and your employees accountable for results.  Make sure these are results that matter and that are visible to others and valuable to your business.

6)    Seek complete communication clarity: It’s amazing how the simple condition of “clarity” contributes to a positive vibe.   When people are clear on where the business is going, and what they need to do, they are free to be positive and productive. When employees are stuck trying to track you down for clarification, productivity and creativity suffer.

7)    Get your organization act together: Being disorganized is a drag for everyone. Sure, some things fall through the cracks when you’re busy, but chronic disorganization is a disease that drains others who have to cover your tracks.

8)    Don’t sacrifice quality for expediency: When there’s a lot of work to do, there’s a tendency to hastily clear your plate, either by cutting corners or passing the buck to others. Taking the time you need to do the job right sets up your employees and the rest of your business for success, and encourages others to take on projects with confidence and energy.

9)    Recognize real-time success: Don’t get so caught up in what’s to come later than you forget to acknowledge what’s happening now. Employees don’t need applause at every turn, but they do need to know that you can be satisfied, and that they aren’t just hamsters running in a wheel.

10)  Set zero tolerance for Low performance:  “Simply put,” says Jon Gordon, “low performers drag the rest of your team down. They create resentment and generate more work for everyone else. And if you let them linger for too long, your best employees will move on. Hold everyone accountable for achieving their goals and meeting performance standards. If someone constantly misses the bar, take action. 

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“Today’s small business owners should know that cutting costs will not save a business,” says Ed Hess, author of the new book Growing an Entrepreneurial Business (Stanford University Press, 2011) and professor at the University of Virginia’s Darden Graduate School of Business. “Customers are concerned about their own finances. When they visit your business, they need to feel cherished. They don’t expect rock bottom prices everywhere, but they do expect good treatment.”

Here are 10 commandments for creating great customer service:

1. Happy employees create happy customers. Employee satisfaction translates to great customer service.  Employees who like their jobs and care about the business they work for are more likely to go the extra mile for a customer.  Creating that feeling in your employees will pay you back exponentially.
2. Always respond quickly. Your customers are busy, too. They shouldn’t be left wondering what kind of service they are going to receive or when. Answering email inquiries, returning phone calls and responding to messages or other contacts on Facebook or other social media should be part of a daily routine. 
3. Make it easy to do business with you. Never make customers jump through hoops to buy something from you. Have a return policy that is easy to understand and puts customer interests first. Provide refunds quickly and efficiently.
4. Keep customers informed of what’s happening. When customers know what’s happening with an order or request, they can enjoy doing business with you. For example, if you’re handling a return and typing information into a computer, you might say, “I’m entering the date of purchase and product number so we can make sure to give you the maximum refund possible.”
5. Use technology to provide good service. Today’s technology offers every small business the means to provide service more quickly and efficiently than ever. “Business owners sometimes assume that customers don’t like to be communicated with online,” says Hess. “And for some that might be the case. But most people appreciate the ease that online communication provides.”
6. Make your customers feel valued. Understand that each and every one of your customers is special. As the late business guru Peter Drucker said: The sole purpose of business is to serve customers. Make sure your employees understand this, and that above all else they must focus on making customers feel valued and appreciated.
7. Remember, disgruntled customers won’t complain; they just won’t come back. If you don’t take time to provide excellent service, customers won’t take time to tell you how to improve your business. What’s more, unhappy customers will tell others about their bad experience. And in this age of social media, the ripple effect can be very damaging.
8. Provide special training for frontline employees. Employees who interact directly with customers are critical to your business. “Their attitudes, communication skills and style of service are what customers associate with your business,” says Hess. “Make sure they are trained to handle the potentially stressful task of working with customers.”
9. Make sure the first customer is happy before moving on to the next. Customers value quick service just as much as they value quality service. But you can’t sacrifice one for the other. “It’s important to make sure one customer is satisfied before you move on to the next,” says Hess. “That can be as simple as asking, ‘Is there anything else I can do for you today?’”  
10. Compensate for mistakes. Never shortchange your customers. “If a mistake was made or some other circumstance is preventing you from providing the best level of customer service, find a way to make it up to your customer,” says Hess. Give employees the latitude to provide customers with solutions when they can’t satisfy a need. 

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