Shelcom BLOG

The Customer Perspective Process

Posted on March 19, 2013 at 11:35 am.

Another insightful post by Tara Gentile

Steve Jobs was famous for his disdain of his customers’ desires.Henry Ford distrusted his customers’ ability to express what they really wanted. Yet, they went on to create products that changed the very nature of their markets. So what gives? What allowed them to create massive market impact while effectively ignoring the express desires of their customers?

Of course, it’s not that simple. Both men had a window into the psyche of their customers. The good news is, you can peer through that same window.

Why Steve Jobs & Henry Ford Would Love The Customer Perspective Process

Steve Jobs famously created Apple’s most revolutionary products without customer involvement. He was happy to ignore what people asked for in favour of offering them something they couldn’t dream of.

Henry Ford had a similar view of innovation. He said, “If I would have asked what people wanted, they would have said faster horses.” Though, whether he actually said this is a subject of debate.

These great innovators may not have asked their customers what they wanted–you shouldn’t either–but they were masters of understanding needs, desires, and the potential meaning new products could have for the customers that made them wealthy beyond imagining.

Steve Jobs real innovation wasn’t the product–mp3 players were around before the iPod hit the scene–and it wasn’t the design either. He might have made great design mainstream but aesthetes were already purchasing products that looked as good as they functioned. Steve Jobs real innovation was that of meaning, as powerful a marketing device as any ever crafted. What new meaning would the iPod have in the lives of its owners?

Simple: Jobs suggested to customers that they could carry 1,000 songs in their pockets. He knew that, beyond better ways to buy music, better ways to store CDs, or better ways to listen to tunes, listeners would love the idea of having their music, on demand, wherever they went.

Jobs could easily have been a genius who died in obscurity instead of the founder and figurehead of the richest company in the world. The answer to this question–and the others he asked like it–was the foundation of his ability to create raving hoards of fans (and money-spending customers).

He took a clear understanding of the current conversation (because markets are really conversations), assessed it from his expert point of view, and shifted a small idea in a market-dominating product.

Ford, similarly, didn’t invent the automobile. Rather, he created the processes by which it could become a product that the vast majority of people in the 1st world must own by understanding, from his customer’s perspective, what was important. He made the automobile easier to drive and easier to produce. He streamlined the array of vehicles being offered.

Those small changes have changed the way we live, work, and play. That’s massive market impact.

Now, you’ve got a lot in common with Steve Jobs and Henry Ford. First off, you’re smart. And you’re incredibly skilled at what you do. You may lack confidence in marketing, pricing, or sales, but you know when you’re creating value for your customers you are masterful.

Second, you’re good at asking questions. You’re curious.

Third, you’ve got an exciting vision for your customers and the world.

All in all, this is a recipe for success. But something is getting in the way, isn’t it?

You might even find yourself asking, “My clients are some of the happiest, most satisfied clients in my industry because I deliver. So why can’t I find more of them?”

Here’s what gets in the way: you think with your expert’s brain 100% of the time. Why? Because it’s fun! It’s fun to feel masterful, it’s exciting to feel on top of your game, it’s energizing to challenge yourself and to be challenged. It’s not that you don’t care about your customers, you really, really do–and I believe Steve Jobs and Henry Ford did too.

What happens if you tune your curiosity to your customer’s perspective?

What happens if you see the world through their eyes?

What could you create if you understood why they express the needs they do?

Or if you knew what thoughts motivated their actions?

You could use your expert’s brain–just like Jobs & Ford–to create something truly impactful. It would take the best of your expert understanding and fuse it with the deep desires of your most valued customers.

Your product would suddenly speak the language your customer needs to hear to “get it” and at the same time be better than they could have imagined.

That’s what Henry Ford and Steve Jobs did. That’s the Customer Perspective Process.

Insurance and SMSFs

Posted on March 12, 2013 at 4:50 pm.

Written by Gosia Slotala

If you have not heard yet, we have aligned ourselves with Partners Group, a leading financial planning and investments practice for all of our SMSF related needs.

Martin Murden, the Director of Technical Consulting and SMSF Audits for Partners Superannuation Services, has recently shared with us very valuable information pertaining to insurance and SMSFs. We would like to pass this valuable information further for your benefit.

A Partners Group 2012 audit survey showed that approximately one in three non-pension paying SMSFs held insurance in respect of the fund’s members. This represents a small increase over the previous year.

Insurance cover falls into one of four groups:

• Life
• Total and Permanent Disability
• Income Protection
• Trauma

The increasing number of SMSFs borrowing to acquire property has resulted in more funds insuring members especially if one is critical to ongoing contributions to the fund. For a couple, this would be the key person in their business. If he/she died or became disabled, the business would either cease or be severely damaged. The business, if it has not done so already, needs to assess its needs in case of such an event.

When a SMSF decides to insure a member to enable debt to be repaid, there are differences to the normal provision of insurance cover to boost a member’s balance. In the usual situation, the insurance premium is deducted from the member’s account and the insurance proceeds are added to the member’s balance. This does not help with the repayment of debt unless the beneficiary or the disabled member elect to take benefits in the form of a pension.

A lump sum benefit would require the insurance proceeds to be paid out of the fund. Even if the beneficiary wanted to leave the proceeds in the fund to repay the debt and commence a pension or income stream, he/she may not be able to do so under the fund’s trust deed. Many trust deeds we have sighted in recent years require benefits to be paid by way of a lump sum if the deceased/disabled member was not in receipt of a pension at the time of death or disablement.

In addition to having insurance cover to boost a member’s benefits, funds with debt to be repaid could establish a reserve account to specifically hold insurance cover in the event of death or disablement of one or more members. Each year an amount equal to the premium payable would be placed into the reserve and used specifically for this purpose. There is some documentation required to put such a reserve in place.

A side effect of using such a reserve is it could also enable an anti-detriment payment to be paid upon death with substantial tax benefits being obtained.

From an audit perspective

Some of the problems The Partners audit team see with insurance policies are:

The policy is held in the name of the insured only whereas it should be in the names of all of the individual trustees or the name of the corporate trustee and it should be held in their capacity as trustee for the fund. Changes to legislation that took effect from August 2012 allow the ATO to impose penalties upon the trustee when assets are not correctly held (insurance policies are considered as fund assets); and
The policy belongs to another superannuation fund. In these cases the policy belongs to a superannuation fund operated by the company issuing the insurance policy. Any amounts paid by the SMSF are roll-overs to the second fund and not tax deductible premiums. And in the event of death payment can be delayed for a lengthy period. The trustee of the insurance company fund has to decide who should receive the proceeds and in the event of a dispute between family members, the Superannuation Complaints Tribunal may make the final decision.

Two final important points to be made about insurance and SMSFs:

From July 2011, a tax deduction is only available for total and permanent disablement insurance where the definition of disablement is an “any occupation” definition. If it is different i.e. “own occupation” then only a partial deduction may be claimable; and
From July 2013, it has been proposed super funds will no longer be able to have trauma insurance cover. Generally, most funds we see do not hold trauma insurance due to difficulties in getting the proceeds out if the client is under preservation age.

Newsletter written by Martin Murden
Director, Technical Consulting and SMSF Audits
PARTNERS Superannuation Services Pty Ltd

Business Name Cancel and Transfer Process – Update From ASIC

Posted on February 25, 2013 at 12:53 pm.

Written by Gosia Slotala

New changes to ‘Cancel and Consent to Transfer’ process for business names

In what is a major improvement, ASIC has amended the cancel and transfer process so that when a business transfers ownership to a new holder, the change has effect on the business names register as soon as the registration application is processed. On a practical level, this enables a smoother transition of a business during a sale and assists new business owners in their interactions with financial institutions.

Details of previous and new business name holders are now immediately displayed on the national business names register for a period of 28 days. After this time, the register updates to display only the details of the new business name holder. There is no longer any delay for new business name holder details being updated on the register.

Up until 27 January 2013, transferred business name holders were recorded on a temporary register on our website for a period of 28 days, until their details were transferred over to the national business names register. This improved process means that the temporary register is no longer required.

Business Name Renewal, Cancelation and Transfer FAQ’s

Posted on February 22, 2013 at 1:20 pm.

Written by Gosia Slotala

Although it’s been almost one year since ASIC took over the Australian Business Name Registration process, there still seems to be as much confusion now as there was when the system was first implemented.

The difference between then and now is that most questions seem to focus on the renewal process and the transfer of ownership process. We hope to be able to clarify these issues for you today.

In addition to answering some FAQ’s we would like to share with you a great informational video we have recently created.

Learn how to register a business in Australia

Business Name Renewal

ASIC is currently catching up on a backlog of renewal notices for the names which were transferred from the state and territory to the national system.

Business names which were due for renewal between June 2012 and April 2013 are receiving renewal notices up to four months past their renewal date.

ASIC WILL NOT cancel a business name, even if the expiry date has passed, until at least 2 months after the date the renewal notice was sent out.

It is the proprietor’s responsibility to ensure that ASIC has the correct postal address on file as this will be the address to which the renewal notice will be sent.

Check out the ASIC list of renewal notices that have been issued and the schedule for future renewal notices.

A business name will only be eligible for renewal once the renewal notice has been sent by ASIC. This notice will contain the business name’s unique ASIC Key which is necessary for the renewal.

If you don’t want to renew a business name registration, the renewal and reminder notices can be ignored. Once the name lapses it will be made available to the public.

To renew a business name the business name holder can either do so through an ASIC Connect account, or through a third party provider if the ASIC Key is supplied.

Transfer of Business Name

If the entity that holds a business name changes, they must lodge an application to cancel the business name and transfer it to the new entity.

Once the application has been accepted, ASIC will issue a consent to transfer number.

The original proprietor of the business name will need to provide the proposed business name holder with the consent to transfer number to enable them to register the business name.

When applying for registration the proposed holder needs to provide a new ABN and the consent to transfer number for the new entity.

Possible reasons to apply for a transfer of business name may be:

The holder sells the business and the business name to somebody else.
If removing partners from a partnership results in one remaining partner, then the business name holder is now an individual not a partnership.
If an individual running a business sets up a trust to run the business, then the holder becomes a trust not an individual.
If a change in partners of a partnership isn’t permitted in the partnership agreement, then a new partnership under a new agreement would result. This is a different entity than originally registered the business name.

To transfer a business name the business name holder can either do so through an ASIC Connect account, or through a third party provider if the ASIC Key is supplied.

In an effort to simplify the complexities of Australian business structures, we have produced and uploaded our first videos to YouTube!

We believe that these videos may be useful to you, so we are happy to finally share them!

Please feel free to use them, or send them to anyone that may be interested.

Visit our YouTube Channel Now!

Essential Online Accounting Advice for SMEs

Posted on February 13, 2013 at 10:41 am.

Written by Gosia Slotala

A MYOB Media Release

Cloud accounting can reduce data entry, produce deeper insights & drive business success

Essential Online Accounting Advice for SMEs

Photo Source: www.area9.com.au

Online accounting is gaining momentum with Australian small to medium business managers and their advisors as they see others reaping the rewards in time savings and productivity gains.

Accounting software provider MYOB shares its top tips to help SMEs keep their financial data secure while working in the cloud, and to highlight the benefits.

CEO Tim Reed says, “Due to the ‘anywhere anytime’ nature of online accounting and features such as direct bank transaction feeds, which reduce data entry, business operators can achieve a better understanding of their financial situation at any point in time. Just as importantly, it enables them to be more confident in the figures and spend less time on admin and more time on growing their business.

“Cloud accounting solutions can significantly reduce manual data entry, and potentially save you many dollars in tax, repayments and expenses by ensuring you have the correct financial information at your fingertips. This is especially important as your business develops through hiring more staff, buying and selling more, producing more invoices, working with more suppliers and so on.

“The outcome is streamlined business processes that give you more efficient reporting and insights, and ensure you are compliant with the government’s regular legislative changes.”

MYOB’s online accounting advice:

Remember: one size does not fit all

Each business is different, so one online accounting solution does not fit or satisfy all. Consider:

Does the solution actually meet your unique needs in its simplicity, workflow and features?
Does it produce the results your accountant or bookkeeper needs?
Is it an all-in-one solution or are there hidden costs, add-ons or other facets that mean extra time and cost?
Will you require access to data with and without an internet connection?
Will it make you as productive as you need to be?
Are the provider’s client support channels available 24/7 via phone, email, virtual chat and/or social media?

Get the set up right

Unless you’re totally across what to do to get the solution installed and working correctly, get an accountant, book keeper or IT consultant involved early to run their professional eye over how you’ve set it up. Perhaps even bring them in to set it up for you. Making modifications afterwards is possible, but can create rework.

Prioritise security

Credibility, technology expertise and reputation of the online accounting solution provider are crucial. Their cloud security policies and procedures should be robust (e.g. 24/7 video surveillance and strict personnel access control, firewalls, anti-virus protection, spam filters, disaster recovery and independent auditing and testing). Consider seeking advice from IT consultants, business advisors and other business owners who understand the market and are up on the latest offerings. Going with an established, profitable, trusted provider is always a good idea – you don’t want them going out of business and your financial data going out the door with them.

Secure bank transactions are essential

A reputable accounting software provider such as MYOB (via its LiveAccounts and AccountRight Live products) lets you securely link your business bank transactions to your online accounting solution. Other companies use a risky practice called ‘screen scraping’. Here, you provide your banking login and password to the accounting provider, who passes them on to a third party to ‘screen scrape’ your bank transactions. They then feed that data back through the accounting solution. It leaves business owners open to breaching bank terms and conditions, plus it increases the risk of mistakes made along the chain and the risk of potential fraud.

Collaborate anywhere, anytime

Ensure you provide the right level of online access to your company files to the right team member, including your accountant and bookkeeper. Provide them with the ability to access from anywhere via the internet, whether on the road, in the office or at home. This eliminates time consuming file transfers and travel, and allows your professional advisors to collaborate with you on building your business by monitoring in real-time key business indicators such as inventory levels and debtors.

Know your numbers

An online accounting solution can generate reports on various business activities. Director of specialist business advisor group The Numbers Game, Leanne Berry, shares her top five insightful reports:

1. Monthly – Profit and Loss Statement shows the income, costs of sales and expenditure for your business. This report lets you do some basic financial analysis such as gross profit margin, budgets and forecasts, to identify and adjust spending patterns or to find ways to increase sales.

2. Weekly – Accounts Receivable shows who owes your business money and allows you to plan an effective debt collection protocol. If you don’t keep on top of your debtors you won’t be able to meet your liability obligations.

3. Weekly – Accounts Payable shows who your business owes money to. This allows you to pay your bills on time and receive any discounts, plan your cash flow and ensure all your obligations are met.

4. Weekly – Payroll Summary shows you your payroll at a glance. It also gives you the opportunity to work out your liabilities for PAYGW and superannuation, and provision it into an account separate from your working account so this money is available when these liabilities are due for payment.

5. Weekly – GST helps you to identify all amounts that are subject to GST. It allows you to provision the GST collected into a separate account as above for payroll and at a glance gives you the ability to identify any transactions that may be coded incorrectly.

MYOB CEO Tim Reed adds, “When your financial data is organised electronically, you can see your financial position at a glance and pinpoint positive and negative trends. When were your peak periods? How well did each of your products/services perform? This vital information can help identify new opportunities to improve your business operations, leverage new revenue streams, tap into new markets, and increase cost-efficiency.”

When it comes to accounting in general, don’t wait to get to know your business better. If cash flow, taxation and forecasting aren’t your areas of expertise, contact a business advisor with experience in your industry to help. Utilise professional training services, whether with the solution provider or with a business advisor to make the most of the solution you choose. You may even find that there’s free software training in your area.

About MYOB

Established in 1991, MYOB is now Australia’s largest business management solutions provider. It simplifies accounting, payroll, CRM, websites, job costing, inventory management and much more for businesses of all ages, types and sizes. Over one million businesses in Australia and New Zealand have used one or more of MYOB’s 50+ products and services. Today, its solutions extend online, delivering innovation through cloud computing and enabling clients to make smarter connections with their business partners and customers. With a network of 20,000+ accountants, book keepers, certified consultants and other professional partners, MYOB provides support and tools that help make business life easier. Visit: http://myob.com.au/smarterconnections.

Business Services: Why it’s Important to Keep Yours Local

Posted on February 11, 2013 at 11:12 am.

Written by Gosia Slotala

Australia’s location provides it with several unique features that benefit local companies, but it also causes owners to deal with the challenges of maintaining a stable business environment. Although a lot of owners choose to outsource some of their most integral functions to providers that are based in another country, this can make it more difficult to keep everything running smoothly.

Business Services: Why its Important to Keep Yours Local

photo credit: lednichenkoolga

In fact, using a provider that is not located in Australia can become very problematic, and it will often be difficult to quickly receive assistance because of each company’s adherence to their own time zone. Therefore, it is always in any Australian business owner’s best interests to look for local solutions to all of their company’s needs.

Important Business Tools that You should Always Obtain Locally

1. Cloud Services – Any business owner who has seen the devastation that can be caused by natural disasters understands that it makes sense to work with a cloud services provider that is located in another city, but it is not a good idea to select one that is in another country. Although the distance might provide safety from localized disasters, it can also cause the website’s load time to greatly increase.

2. Corporate Documents – Many companies utilize other providers to create specialized corporate documents, but this can become very problematic if you select a business that is based out of another country. Not only is there the potential for delays due to the time zone difference, but you may also deal with a language barrier that will present you with unusable documents. To avoid this problem, you should hire a local company that specializes in creating corporate documentation.

3. Local Web Hosting – When it is time to select a host for your website, you should always look for a business that is located in Australia. One of the most important things you can do for your business is find a local web hosting service, such as aussiehost.com. Business owners that choose a web hosting service in a different region or even a different country to save on costs may learn the hard way, it can actually end up costing you customers when they tire of your long loading times. Local hosts can ensure that this won’t be a problem.

4. Customer Service Department – You might be able to save money by outsourcing your customer service needs to a call center in another country, but you will also turn off many of your customers by utilizing this cost saving method. Instead of taking the risk of alienating the customers who keep your business successful, you should always provide them with highly trained, local customer service representatives to answer their calls and emails. By doing this, your customers will not experience any dialect issues that make it hard for them to receive the necessary assistance, and you can also help your local economy by providing work for your fellow Australians.

5. Internet Service Provider (ISP) – Although you will probably receive cost-effective options from providers based in several different areas, it is imperative to choose a local ISP to ensure that you can provide a stable environment for your customers and employees. Keep in mind that the farther away your ISP is located, the slower your connection will be. Therefore, you need to use a reputable, local provider to keep your business on track.

By utilizing local services, you can increase your productivity, and you can also enhance your company’s reputation. After all, your customers will appreciate the fact that your business is giving money to Australia’s economy instead of outsourcing everything far away.

Shelby Warden is a freelance writer and small business owner. Aussiehost.com is a unique provider of web hosting, reseller hosting, vps accounts, and dedicated servers down under, and their reliable, speedy, and high performance hosting solutions are everything that an Australian business could hope for. Their servers are situated just outside of the Sydney CBD, making them close enough for very high speed connections, but far away enough to limit any issues to infrastructure attacks or disasters in the main area of business

Limited Recourse Borrowing Arrangements – Buying a Property through a SMSF

Posted on February 7, 2013 at 3:42 pm.

Written by Gosia Slotala

Written by : Martin Murden

Director, Technical Consulting and SMSF Audits
PARTNERS Superannuation Services Pty Ltd

Background

Since 2007, self managed superannuation funds (SMSF’s) have been permitted to borrow to acquire assets. Almost all purchases by a SMSF with borrowings relate to property.

Structure

It is necessary to first establish a security trust (Security Trust) to hold the property whilst the debt remains and second to have a transfer agreement between the SMSF and the Security trust. This can be seen in the following diagram:

SMSF

It goes without saying that a SMSF is required.

The Partners Group recommends a corporate trustee for SMSF’s for asset protection reasons, administrative efficiency, continuous succession and estate planning flexibility. Whilst it is not a legislative requirement, lenders have different policies with regards to SMSF trustees and may insist on a corporate trustee.

If there is an existing SMSF, the trust deed governing the SMSF may require updating either because of the changes made since the SMSF was established or because the wording in the deed relating to borrowings is insufficient for the lender.

Security Trust

A Security Trust is a trust, controlled by the members of the SMSF, that has one purpose and that is to hold the property until the debt has been repaid.

The reason a separate trust is required is because legislation prohibits the SMSF from using any of its assets as security for the debt. A property held by the Security Trust can be used as security.

Again, the Partners Group recommends a corporate trustee for the Security Trust. The directors would be the members of the SMSF.

Transfer Agreement

This is an agreement between the SMSF and the Security Trust recognising the Security Trust is holding the property in trust for the SMSF and will transfer the ownership of the property to the SMSF once the loan has been fully repaid. It is important that the transfer of the property to the SMSF occurs at this point to ensure continued compliance with superannuation legislation.

Purchase a commercial or residential property

The only restriction imposed upon the property being acquired is a SMSF cannot acquire a residential property from a member of the SMSF, a relative of a member or an associated party such as a company owned by the member or a trust in which the member is a beneficiary. It is important note a residential property cannot be used by a member of the fund or a member’s relative.

Limited Recourse Borrowing Arrangement (LRBA)

The only security for a SMSF borrowing is the property itself (limited recourse). No other assets of the SMSF can be used as security.

The loan can be sourced from a third party lender or a member of the SMSF or an associate, such as a member’s family trust (self financing loan).

A bank will typically require a deposit of up to 30% (residential property) and 35% (commercial property). The amount of deposit required can be reduced if a self-funding loan is used.

Lenders will require personal guarantees, however these cannot be given in the capacity as a member of the SMSF as the recourse of the lender to the SMSF is limited to the asset in question. If the SMSF defaults on the loan, the personal assets of the guarantors may be called upon to repay the debt.

A self financing loan still needs to be properly documented and it must be on commercial terms.

A loan can be re-financed but only be for the current amount owing on the existing loan plus associated costs.

Financial Advice

Financial advice covers the viability of the strategy including cash flows, tax, contributions and personal risk protection. In addition the advisor would sign off on the strategy for lending approval.

It is not requirement of law for a financial planner to be involved. If the loan is to come from a bank however the bank will require evidence that the SMSF has received advice from a financial planner.

The Partners Group recommends that it is prudent to receive financial advice in all situations.

The benefits of borrowing to acquire property

There are two key benefits:

a property can be acquired even though the SMSF does not have sufficient cash to purchase the property
the SMSF can use gearing to obtain capital growth on the total property value whilst only partially paying for the property.

Common problems sighted

These are some of the issues that may arise:

(i) applying for the wrong type of loan. Whilst the ability for a SMSF to borrow to buy property has been available for five years, not all mortgage brokers or banks have experience in this area. If the wrong type of loan is used, it may be costly to rectify problems. And if the property is not held via the Security Trust, it may not be possible to replace the loan with a LRBA;

(ii) acquiring the property with inadequate funds. Consideration needs to be given to how the loan with be serviced if the property becomes untenanted for a period of time or the tenant fails to pay rent when due;

(iii) forgetting the insurance cover on the lives of the SMSF members. This typically occurs when money is to be transferred from an industry/retail fund into a new SMSF. Replacement insurance cover should be arranged prior to the transfer of money as insurance cover ceases at the time of transfer;

(iv) signing a contract of sale with an early settlement date. Typically, lenders require a minimum of 60 days from receipt of a loan application to settle the loan;

(v) not seeking advice before entering into the sale contract, whether that is financial or legal. For example, LRBA’s may not be suitable where there are plans to improve or develop the property;

(vi) not documenting the transaction properly;

(vii) high degree of variance of experience and understanding between lenders. Each lender and sometimes branches of the same lender has different ‘requirements’ with regards to the LRBA documents and structures. Where the lender’s requirements are not made clear at the beginning of the transaction, or at the earliest stage possible, there is the real potential for delays to satisfaction of finance conditions and settlement;

(viii) not having the right purchasing entity named in the sale contract. This is not a huge issue in Victoria but in other states new contracts may have to be entered into or there could be stamp duty implications with regards to nominating a new purchaser;

(ix) not taking an integrated approach with regards to advice from finance brokers, financial planners, lawyers, conveyancers, superannuation advisors. Often additional time and expense are incurred where advisors are engaged from several different organisations.

Offering from Partners Group

The Partners Group has extensive high level experience in the LRBA space, with the Partners Group having successfully completed hundreds of LRBA’s for clients purchasing both residential and commercial property through their SMSF’s.

Partners has worked with a wide variety of lenders, and has assisted clients in Victoria, New South Wales, Queensland, South Australia, West Australia and Tasmania.

The Importance of Being Customer-Centric

Posted on January 24, 2013 at 9:59 am.

Written by Gosia Slotala

Another insightful post from Tara Gentile. Definitely worth a re-post and most importantly a read.

The Importance of Being Customer Centric

Photo Source: http://bit.ly/wnq6D2

Who powers your business? It’s easy to imagine that it’s powered by you: your passion, your ambition, your expertise. But a more sustainable power source for your business is the person who makes it work: your customer.

While your business is an act of self-expression and guided by your unique vision, it exists in partnership with your Most Valued Customers.

When your business draws energy from those partners, it doesn’t require your constant support as owner. You can empower your team to draw inspiration from your customers. You can create tools that allow your customers to help themselves. The list goes on and on.

Unfortunately, it’s rare that you’ll see good advice on understanding who those people really are. Most teaching about your right customers is:

Business-Centric – Your customers really do have lives outside of waiting for your company’s next offer.
Lack Synthesis – What are you going to do with the fact that your customers read Sunset Magazine, shop at REI, and buy a lot of Colombia clothing?
Don’t Provide for Deep Empathy – The way your customers think and feel, along with the mindset and internal scripts that guide them, is the real key to effective communication.

Now that I’ve told you what’s missing from the usual advice around finding your “ideal customer,” let’s reconstruct some fresh ideas about who these people are and how they can power your business.

First, as far as I’m concerned, you and your customer play equal parts in attracting each other. Just like you can’t stalk the subject of your more carnal desire to the point of loving you, you can’t just chase after customers if they’re not interested in what you’re offering.

You have to respect that there are customers who might meet the profile of the customer you have in mind as ideal but they may not be interested in or ready for what your business has to offer. Your job is to not only create ~~a profile~~ an understanding that guides you to the best people but one that guides people who are ready and willing to your business.

That may mean you need to alter who you think you’re meant to serve. It may mean the people you’ve been chasing are all wrong for you. Or it may mean that you need to shift your mindset away from “stalking and converting” to “romancing and wooing.”

Next, the work you do around better understanding your customers needs to be Customer-Centric, not Business-Centric. A typical business-centric survey question is, “What features would you like to see the next time we update this product?” or “What topics would you like us to cover on the blog?” Your business is top of mind for you so it’s understandable that it’s the easiest way to approach understanding your customers.

However, your customers will give you much more useful information if you imagine your business doesn’t exist. Weird, I know. This approach works whether you’re sourcing information directly from your customers or whether you’re sourcing the information from your own brain. Focus on your customers needs, questions, and desires. Think about their problems in terms of stumbling blocks or barriers. Consider the jobs (social, functional, and emotional) they need to get done on a daily basis.

Try questions like this:

What frustrates you most about trying to…?”
What skills do you believe would improve your ability to…?”
How do you normally spend your weekends? Why?”
If you could wave your magic wand and change 1 thing about…, what would it be?

Try to maintain as little bias and as much genuine curiosity as possible. There’s a time for sourcing your expertise, but it’s not now. Don’t worry about your relationship to the potential customer (trust me, they’re not), worry about your customer’s relationship to themselves, their time, their energy, their families, and their communities.

Once you’ve gathered that kind of unbiased information and you’ve examined your customers’ whole lives, it’s time to synthesize.

I have two commandments for this step. First, ask “Why?” And second, trust yourself.

The key to synthesizing the customer-centric information you gather is to always be looking for the motivation, values, or beliefs that swim underneath it. That’s what makes up the mindset–or worldview–that causes your customer to act the way she does, including acting to purchase something or share it with her friends on Facebook.

Each time you ask “Why?” and dig a little deeper, you reach more useful information. While knowing that your customers read Sunset magazine, shop at REI, and wear Columbia could help you place an ad or style your photos, asking “Why?” can lead you to more insightful information. You’ll learn that they appreciate an adventurous yet laid back lifestyle, value the environment, and have an appreciation for passion & expertise.

As I said, the trick here is to trust yourself. You don’t need to ask your customers directly why they like what they like or do what they do, though that can be helpful (it can also be unhelpful). Instead, ask yourself why your customers like what they like or do what they do. And trust that the answers you provide are true.

The thing is, we all gather information more information about people than we realize. We are constantly making inferences from what people say or do. We are receiving unspoken cues all the time. We’re social creatures and it’s how we survive social situations without getting punched in the face.

Unfortunately, most people turn that off when they think about their customers. They go cold and forget to check in with their social brain to uncover the information that is hiding just below the surface. But, as soon as you allow yourself to ask “Why?” and then trust the information you receive from the resources of your psyche, that information will come flooding to the surface.

My final point is on creating deep empathy for your customers. Dan Pink calls empathy, “a stunning act of imaginative derring-do.” It’s as close as I’ll ever get to reading someone’s mind, though that’s a comment I often receive.

Deep empathy isn’t just what you know about your customer. It’s literally being able to step inside his or her life from afar and use the same thought patterns & emotions that guide her actions. It’s anticipating what will resonate with her on the deepest levels.

Creating deep empathy for your customers means that you have access to their inner most feelings and mindsets. When you have that access, you can create the frameworks that allow you to be of greatest service. You can stop treating (or marketing to) surface level needs and start addressing their core desires. You can help them move past the barriers that stand between them and what you offer (i.e. buy).

Again, the action you need to take here is to unlock your social brain. Instead of focusing on concrete details, allow yourself to probe the feelings of your customer. Given all what you know about her experiences, how would you feel if you were her? What true desires would you hide from the world if you were her?

How do the answers to those questions change how you approach your brand, your marketing, your sales process, and your product development?

Remember, the goal with creating a deep understanding of your customers is not to convert people who are uninterested in what you do. The goal is to attract the people who are already searching for what you offer and guide them gently and sincerely to what they seek.

If everything your business does–from a lowly tweet to a signature product to a rebranding campaign–is powered by a deep understanding of your customers, it becomes easy for your customers to buy and for your business to serve them. That ease is the key to sustainable, enjoyable growth. And it’s powerful.

You can find the original post here - Who powers your business? My answer might surprise you…

Working From Home? How to Keep Your Business Legal

Posted on January 23, 2013 at 1:25 pm.

Written by Gosia Slotala

The New Year is always a time of resolutions and setting of goals. For many people, the ambition is to propel their hobbies or interests into real, money-making businesses. Many will start off the year with such aspiration, some will follow through. For those who do, it will be a time of discovery and many challenges.

Working From Home? How to Keep Your Business Legal

Photo: http://chumcubo.com/

You bake amazing cupcakes that your neighbours love, or you’re the guy your friends come running to for computer advice. You know your business has major potential. You daydream about hiring employees and buying that new car, or maybe even becoming a guru in your industry, but do you know what it takes to get there? You’ll probably start small, alone, just you working from your home office. Great! You think, that’s exactly what I want.

What’s next? First thing’s first! You need to make sure that your home based business is legal and you and your assets are protected. Here are some simple guidelines on how to safeguard your new home business:

1. Choose the right Business Name:

Picking the right name for your business is tricky. You want a name that is descriptive yet catch. It has to be memorable. You should do your research. Search the net for your competitors and analyze their names and slogans. This can help you get on the right track. Once you narrow down two or three names, conduct a business name availability search to see if any of the names are up for grabs. An ASIC business name search will provide you a list of same and similar business names already registered in Australia. Even if the name you want is available to register through ASIC doesn’t me that it isn’t trademarked. Make sure you do a thorough trademark search to ensure you are not infringing on someone’s intellectual property. You may also want to consider trademarking your chosen name for that extra level of protection, although you can wait to do that later when your business takes off.

2. Choose the right Business Structure:

When you are ready to set up shop, your most important move will be to hire an accountant and a lawyer. Only accountants and lawyers are qualified to give you financial advice as well as guidance on picking the appropriate business structure for your specific circumstances. Just because your friend started his business as a sole trader, does not mean that this will be the right structure for you. You may have a riskier business plan, you may be investing much more money or you may have many more assets to protect. There is a set of advantages and disadvantages for each available business structure in Australia. You must do your research and speak to qualified consultants before you make a final decision. Choosing the wrong business structure could be a very costly mistake. Once you choose your business structure you will need to register your business with ASIC. Find a provider that you can talk to and trust to take care of the registration.

3. Select a Registered Agent

Many people working from home do not want their business address (which happens to be their residential address) to be made available to the public. Some people think it is a safety matter; others simply do not want their clients knowing that they work from home. Unfortunately, ASIC require that you provide a physical business address which is then made available on the business register. Because PO Box addresses are not accepted, most often new business owners will nominate their accountants address as their registered address. Alternatively, in the case of a Company Incorporation, a corporate service provider can serve as the registered agent.

4. Permits and Insurance

Just like for your health your life or your travel, you should have business insurance. Finding an insurance policy appropriate for your needs can be tricky. It’s important to understand that policies are different and cover different needs. Make sure that when comparing policies you compare the features and benefits and that you’re not just focused on the price. With so many policies to choose from, it’s imperative that before you buy a policy, you consult with your lawyer and make sure they approve. Also equally as important is obtaining all the necessary permits and business licenses that you may need. For example, if you are baking cakes, you may have to undergo a health inspection. The Australian Business Licence and Information Service (ABLIS) helps you find the government licences, permits, approvals, registrations, codes of practice, standards and guidelines you need to know about to meet your compliance responsibilities. Make sure you do this at the start. If you wait too long, it may be too late. Penalties for not complying with the law can be hefty.

Will you be starting a home based business this year? Do you have any additional advice? Please share with us what you know so that we can all benefit!