Linnea Blair :: Page 10 :: Advisors On Target

Author Archive for Linnea Blair – Page 10

Finding Your Niche

Posted by Linnea Blair on

07/30/2008

Large companies often leave smaller market segments unserviced since they don’t represent, for them, a sufficiently profitable target. A small business can capitalize on these unmet needs by developing a product or service that fills the gap. You can think of a niche market as a narrowly defined group of potential customers.

A niche market can be a built on developing a product for a particular consumer demographic, such as manufacturing kosher milk products to meet the dietary requirements of particular religious groups. Many service firms have grown their business by deciding to build up expertise in how a certain industry works and focusing on attracting clients from that industry based on the expertise they can offer. Others will concentrate on a particular service line such as a dentist who specializes in pediatric work. Still other businesses concentrate their resources on marketing to a particular region, so they could be said to operate in a geographic niche. The competitive advantage of being in a niche market derives from being alone there and of being able to offer a level of expertise others can’t match or perfectly filling a particular need.

Niche market businesses are frequently small scale since they tend to focus on identifiable sub segments of a larger market such as cleaning blinds instead of cleaning offices in general. But it’s an error to think that that is a necessary association. The First Commerce Bank, in Charlotte, N.C became hugely profitable concentrating on servicing small business clients and some accounting firms have moved into the big league through providing advice to clients in specific industries or occupations.

There are three basic ground rules for making niche
marketing work for you.

1. Develop a detailed marketing plan:a well developed marketing plan is the key to successful niche marketing. It has to be very specific about the basic business concept – what you are selling, who you are selling it to, why they would buy it (the benefit to the customer) and how you will make money out of it.

2. Appoint a niche champion:the secret to tapping into a niche market and working it to get the best return is to know just what it is the consumer will really value from the product or service you are offering. If you need to, find a niche champion with the knowledge and experience in the product/service that will enable you to develop just the right package. If your niche marketing initiative is really a subsidiary line of business within a larger organization, for instance preparing a line of gluten-free products within a general bakery business, ensure the project is properly funded and the niche champion has sufficient authority and respect to be able to keep the project on track. Don’t throw away the opportunity through bad planning and execution.

3. Market hard: niche marketing succeeds or fails on its success in connecting with exactly the right kind of customer. Both the target market and the marketing channels that will most likely reach them should be closely defined. Give careful consideration to what marketing messages will work best as ‘hot buttons’ for prospects and will prompt them to purchase the product. Marketing spend may not need to be large but it does need to be well focused so as to get your name known within the target market and educate them to the benefits of using your product/service. In the case of gluten-free bakery products, you could advertise in health food stores, food bars, natural healing centers and healthy living publications.

The famous entertainer Bill Cosby once said, “I don’t know what the secret of success is, but I know the secret of failure and that was trying to please everybody.” The same wisdom applies in business as in entertainment. For many businesses, large and small, creating a product or offering a service that satisfies the needs of a niche market has been a recipe for success.

Information for this article is sourced from RAN ONE.

Categories : Business Strategy, Marketing

Tags : Business Strategy, Marketing

Drumming Up Business During Slow Times

Posted by Linnea Blair on

06/30/2008

Every economy and every business has its ups and downs. The trick to weathering the storms successfully is to be prepared for them.

Reactivate Dormant Accounts
The quickest and easiest way to do this is to sit down with your list of past customers, call them, say hello, and see what’s going on. Don’t make this a hard sell call, just a reminder that you have done business before and you are interested in working with them again. You don’t have to ask for work directly but when you end the conversation you might say something like, “Well, it’s been good talking with you. Keep in touch, and if there’s anything I can ever help you with, don’t hesitate to give me a call.” If you are uncomfortable about phoning, send a letter, flyer or brochure that mentions new products or services and includes testimonials from other customers.

Provide Superior Service To Current Customers
When business is slow you want to do everything you can to hold on to your existing customers. The best way to hold on to them is to give them not just their money’s worth, but more than their money’s worth. Now is the time to go the extra distance, give that little bit of extra service that can mean the difference between dazzling them and merely satisfying them. The best protection against a downturn in business is an active list of delighted customers.

Have Existing Customers Drum Up New Business For You
It’s probably fair to say that the customers you’re currently dealing with associate with like-minded people – people who are in a similar income bracket, have similar interests, hobbies, and buying habits. And therein lies your sleeping giant. A referral system can harness this giant by encouraging existing customers to refer these people to you. If it’s true that most of your customers are happy with your business and the products and services you sell, then it follows that most would be quite happy to refer you given an easy way to do so, such as displaying your brochures in their business. Slow times also provide the opportunity for more active networking, looking for opportunities that may only present themselves when talking to people.

Plan An Ongoing Marketing Campaign
Slow business presents an opportunity to increase the amount of your time spent on prospecting for new business. During a lull in business you need to make this extra effort to attract clients or customers, follow up on leads and close sales. What types of marketing work best in slow times? Use a combination that includes direct marketing (direct response print ads, sales letters, self mailers, postcards, special offers) plus low-cost/no-cost visibility enhancing publicity techniques (press releases, articles, speeches, booklets, seminars, newsletters). Avoid costly image building marketing such as large space ads, slick corporate brochures, expensive annual reports and other marketing communications that can drain your budget without producing sales.

Add Value To Your Existing Services
In a slow economy customers are more concerned with price than ever before. Actually, their real concern is making sure they get the best value for their money. You can win new customers and retain existing ones by enhancing your services and providing your customers with more value for their money. For instance, if you are selling a commodity item you could add value by offering faster delivery than your competitors. Or a wider selection. Or easier payment terms. Or a better guarantee. There is no need to give away the store and promise an excessive amount of extra service. The extras you provide need not take a lot of time or cost a lot of money.

Keep Busy By Working ON Your Business
A slow period in your business is a good time to busy yourself with internal projects that will improve the business, such as developing a new marketing strategy, making technical improvements to an existing product, auditing and improving your customer service procedures, revising your newsletter or website, or any of a hundred things that you couldn’t find the time for previously. Now you have the time. So do them.

Information for this article is sourced from RAN ONE.

Categories : Marketing

Tags : Economy, Marketing

Realizing the True Value of your Business

Posted by Linnea Blair on

12/31/2007

f you are planning to sell your business, it’s clearly an advantage to have an objective idea of what it is worth. Even though ultimately a business is worth what a buyer is willing to pay, it’s easy for a seller to undervalue and lose out in the deal or to unrealistically overvalue and miss out on attracting buyers.

Many companies are oddly reluctant to invest in getting an accurate valuation. Even among owners who had tried to sell their business at one stage, a survey reported by CFO.com found that only 12% of them had ever had a formal valuation done. This is surprising. Guessing the value to put on your biggest asset is really risking your future.

There are a number of different valuation methods and different methods may be appropriate for different types of business. For example, if you run a services business there’s little point in evaluating it based on the value of its physical assets. Other methods consider intangibles such as ‘goodwill’, which are difficult to put a figure on but can represent a significant element of the value of some businesses. And value may also be in the eye of the beholder – it will actually be worth different amounts to different people depending on their reason for wanting a business.

A variety of factors are taken into account in ensuring that a valuation is accurate and useful. Primarily, the valuation needs to be in line with hard data, particularly your current and past financial position. Some valuation methods focus on financial data such as profit levels, asset value, cash flow and debt carried by the business. Other factors are not so cut-and-dried. The valuation might incorporate financial projections for the next three to five years. It might consider intangible assets, such as intellectual property like patents and trademarks, brand names and goodwill. You also need to consider the context. Your own company may be doing very well but its value will be diminished if it is part of an industry that is in serious difficulty or in decline overall.

There are over a dozen different valuation methods. The crudest methods operate by rule-of-thumb or ‘multiples’. For example, landscape businesses are estimated to be worth 1 to 1.5 times their discretionary earnings plus the value of their capital assets. However, multiples only give a rough, industry wide ballpark figure for business value. They do not necessarily give the real value of a particular business. More accurate methods include the ‘balance sheet’ approach, which basically subtracts business liabilities from assets. The ‘adjusted book value’ method is similar but uses current market value rather than purchase price or depreciated value.

Retail and manufacturing businesses are generally assessed according to the value of their assets, given that they tend to store large amounts of value in their inventory or capital assets while service company valuation is based on the ‘capitalization of income valuation’ method, which places a heavy emphasis on intangible assets. It’s also possible to calculate the value of a private company by comparing it with an equivalent public company and making appropriate adjustments. Business value can also be estimated by anticipating cash flow over a three to five year period and adjusting that into current dollar terms.

A current valuation can be important at times other than sale. There are numerous business and legal situations that require a detailed valuation, among them: when considering a merger or acquisition; when seeking investment capital; when buying out a partner or implementing an employee stock ownership plan. A properly determined valuation inevitably enters into less pleasant activities such as shareholder disputes and divorce settlements. Tax minimization planning can involve business value, for example in developing estate and gift transfers.

A valuation can also indicate how your business compares to its direct competitors. It can identify the strengths and weaknesses of your business. When a valuation identifies weaknesses, it can help you focus on building long term value into your business. This will improve your outlook in terms of succession and estate planning.

With this many potential situations requiring a business valuation it’s important to have an up-to-date professional estimate of the real value of your business. To get a valid and commercially useful valuation you will need to work closely with a professional who has experience in the area. Your accountant already has a good understanding of your business and will be able to advise you on which valuation method will be best suited to your business circumstances.

Information for this article is sourced from RAN ONE.

Categories : Business Strategy

Tags : Business Planning, Business Strategy, Business Valuation

What’s next?

Posted by Linnea Blair on

09/09/2007

In my earlier post “What Chuck has learned”, Chuck states, “So, what’s next?” Good question. There always ought to be something “next” to draw us forward, engage our interest, and just keep us from becoming content with the status quo.

I am a big fan (one might say geek) of NBC’s The West Wing. I own all 7 seasons and have watched them all more than once. I always pick up on another snappy bit of dialogue that I missed the first time around…anyway, I digress. Jed Bartlet often uses the phrase “What’s next?” on the show, meaning we’ve mastered that topic, said all we need to say about that, discussed it enough, we’re done, time to move on to the next thing.

Sometimes even when we are not done, even when we are still working on mastering something, it is still time to be thinking about what’s next. So I am creating a whole new category for this blog about new things to be thinking about to move our businesses forward.

Stay tuned!

Categories : What's Next?

Tags : Small Business Coaching, Small Business Consulting

10 Reasons Why You Should Become an On Target Business

Posted by Linnea Blair on

08/31/2007

1. You will change your business – for the better!

2. You will evolve as a person and a professional

3. You will become a better leader and manager of people

4. You will learn to delegate (better, anyway!)

5. You will learn how to evaluate the progress and success of your business

6. You will become intimately acquainted with your “numbers”

7. You will set goals, develop a plan, take action steps…and see results!

8. You will be able to compare your company to peers in your industry

9. You will develop friends and find mentors among your peers

10. You will keep growing and innovating

11. You will have fun doing it!

Categories : On Target Program

Tags : Advisors On Target, On Target Program, Small Business Coaching, Small Business Consulting

Good Business Deeds Can Be Good Business Deals

Posted by Linnea Blair on

11/27/2006

‘Cause’ marketing that links your company or brand to a non-profit group or charity enables you to promote your business while you give something back to your community. Perhaps the most interesting aspect of this kind of marketing is that it’s been shown to make customers feel better about deciding to purchase and that translates into an increase in repurchase intentions.

Consumers transfer their emotional bonds

Many people have emotional bonds with a non-profit group. They may even be regular financial contributors or do volunteer work for a non-profit organization. When these people see a business that’s supporting this organization they’ll often be predisposed to purchasing from it. “Look at what you sell and understand the targets you’re trying to reach. Then align yourself with causes that will bring out the emotions of that audience, from a grassroots, a community and a media standpoint,” advises Rodger Roeser, of Justice & Young Public Relations in Cincinnati.

Employees feel better about their employer

Surveys consistently show that whether candidates are choosing an employer or employees are deciding whether to stay with their present company, the degree to which a business demonstrates a social conscience is perceived as increasingly important. In fact, a majority of employees of companies in many industries have said they’d work for less money if they felt their employer was socially responsible.

It’s good for PR and community relations

Naturally, there are a lot of positives about supporting a cause that will benefit the image your business has in the community. You’ll be seen as a good corporate citizen and as an organization that contributes to the welfare of everyone in the community.

Seek alignment with your business and your customers

There are thousands of causes and some will no doubt relate to your business activities. Find a cause that has a link with your company, no matter how tenuous, so that people will understand how your business fits into the cause overall. The cause needs to also be related to the interests of your customers. It should align with their feelings and beliefs, and not be in conflict with other organizations they might want to support.

Tell the world what you’re doing

Although it might seem a bit ‘commercial’, your business will only benefit if it tells the world at large about your involvement with the cause. You need to spell out what it is you’re doing and why you’re doing it. It will also help if your business becomes a conduit for your customers to help the cause by making donations through your website or at your business premises.

Your cause marketing activities should be part of both your external marketing and your internal communications. It should be featured in your promotions, your packaging and your website, as well as referred to in your employee newsletters.
Give your employees and your customers a chance to participate in the cause by hosting a function or sponsoring an event where the proceeds go to the cause.
Ask the cause you’re supporting to promote your association with them. They have every reason to do this; the non-profit world depends on donations and they like to tell prospective donors that they’ll be in good company when they part with their funds.

In today’s competitive world consumers want to know what a business stands for. Cause marketing will tell them about your business values and reassure them that part of their purchase money is going to a good cause.

Information in this article is sourced from RAN ONE, Inc.

Categories : Marketing, Relationship Marketing

Tags : Charitable, Marketing, Non-profit, Relationship Marketing

Find Your Niche and Market To It

Posted by Linnea Blair on

10/31/2006

There are many definitions of a ‘niche’ market but essentially they’re a subset, a smaller segment, of your existing target market. This is very important because it means they may already be aware of you and are already prospects for your company’s offerings.

Members of your targeted niche will share a similar set of characteristics. You can capitalize on that by satisfying those common needs and catering to their particular interests. They can be extremely profitable customers if you provide them with just what they want.

It all begins with knowing the details of your wider audience. Who are they? What are their interests? What do they purchase? What do they read? What TV shows do they watch? Your niches are the separate subsets of this total market – these can be broken down by such demographic factors as age, geographic location and income as well as by more subjective categories such as personal taste and preference in entertainment.

Just identifying a niche segment isn’t sufficient to guarantee marketing success. It must enable you to achieve enough sales and profitability to make it worth your while setting up a specific campaign. Some of the basic requirements of a good niche group to target are:

It can be measured quantitatively
It is large enough to generate a profitable sales volume
It is accessible to your company’s distribution channels
It will respond to an affordable marketing spend
Repurchase intentions can be forecast

As an example, assume your company manufactures sporting equipment. A typical niche within your larger audience would be males 18-25 who play a competitive sport on weekends. Once you’ve identified the niche and which of your products to sell into it (deodorants and products for the treatment of sore muscles are two product categories that would sell well to this niche), find suitable channels of communication to get your product in front of them. You could market yourself at their sporting fields through sponsorships or advertising in event programs for instance.

Here are three ways to capitalize on the opportunities that niche markets represent:

1. Provide something that meets their specific needs

Members of niche markets see themselves as being relatively unique. The benefits you promise them from whatever you’re selling must have some sort of special appeal to them. Most niches respond to offers of something that’s new or really exciting. You might need to bring in a new product or service, or modify an existing one to cater to them.

2. Communicate in their language

Every niche has its own language whether its computer jargon with IT enthusiasts or the latest ‘in’ phrase among the teenage market; you need to learn it so they’ll understand you when you’re talking to them. Communicate with them from the position of someone who knows them and understands their particular needs. Communication extends to the visuals you use in your advertising as well – match the images in promotional materials to reflect the appropriate age group, clothing styles and so forth of your niche market group.

3. Investigate and test before committing

Niches are really a new market area that you need to understand before charging into. See what your competitors are doing in their marketing but try to find a unique point of differentiation that will enable you to stand out from the others selling to this group.

Then, before making a large financial commitment for stock or advertising, use focus groups or group discussions to give the products and materials a test drive so as to gauge what the likely wider market response will be.

Information in this article sourced from Ran One.

Categories : Marketing

Tags : Marketing, Niche Market

Don’t Freeze Making Cold Calls

Posted by Linnea Blair on

09/13/2006

Cold calling is a widely used method of prospecting for new customers. Any business owner with a telephone knows that two or three times a day someone they have never met will contact their company with some kind of proposal like seeking an opportunity to quote against an existing supplier.

It’s not easy to make cold calls and those who have the job of making them often feel uncomfortable about their assignment. But there are ways to ‘warm up’ to the task so that you will feel more relaxed and in control and make the whole process a lot less scary.

1. Send an advance notice
A cold call is usually an interruption for the person on the other end of the phone. Understanding their needs is one of the most important parts of cold calling. You’ll only have a brief period of time to get your ‘foot in the door’ before the prospect begins to resent the intrusion, and making the most of that small window is essential.

Calling completely cold is probably the biggest mistake cold callers make. Arrange a mailing so that your prospect has a day or two notice that you’ll be contacting them. Send them a simple brochure or leaflet – nothing too long or flashy – that outlines the basics of your offering and promises that you’ll be in touch shortly. They may not be exactly looking forward to your call, but at least they’ll have seen your name and product and know where the conversation is going. This also allows you to introduce yourself by telling them you sent them a communication and inquire if they had received it.

2. Know something about your prospect
The more you know about the prospect’s business the more confident you can feel about asking the right questions and giving them the right answers to their questions since you’ll already have a rough idea of how you might be able to help them. Look for their advertisement in the Yellow Pages, and if they have a website go through it carefully.

3. Know what you want to say
This doesn’t mean reciting a script word-for-word. Nothing sounds worse or is more likely to get a “Sorry, not interested” response. But if you work out what you’re going to say before you make the call you’ll be more confident about making it. You need to introduce yourself, explain the purpose of your call, and get through the ‘screener’ to reach the decision maker. Once you’ve got the right person the real call begins. Developing a checklist to track things during the call is a good idea to ensure you cover all the main things you want to get across.

4. Talk in terms of helping rather than selling
Be natural and friendly. Explain briefly what you do and end with a statement that you’d like to see whether you might be able to help them. Explain that you’d really like to meet them and that there’d be no obligation on their part; you just want to explore the possibilities for satisfying a need in their business. If you’re sincere and don’t start selling something right away you’ll have a much better chance of turning the call into a conversation. All you want is a meeting, not a sale.

5. Have an offer ready
Because you’re already taking up their time, and want to take up even more of it, find a way to make it worth their while. You might say, “Look, I’ll set aside whatever time suits you on Thursday morning and I’ll take you out for breakfast or a coffee, whichever suits you best.”

6. Rehearse your call lines
Rehearse with someone on the phone who can answer your call and take the role of your prospect. As they come back with a variety of responses you’ll get the feel for handling them. The person you want to speak with may be out, may be busy, or may just not want to talk with you. Success in cold calling is frequently the result of the way you convince the person screening the calls more than anything else.

Rejections will happen and they’re nothing personal so don’t take them that way. Some people may be rude or hang up on you – it’s just part of cold calling. However, your call may remind them to take another look at the leaflet you sent them and they might call you back later. You can never tell.

Just remember to be yourself. If you believe in what you do and that you can really help your prospect’s business, there’s every reason to be confident that you’ll win through with the prospect and eventually get the opportunity to present your product to them.

Information in this article is sourced from RAN ONE, Inc

Categories : Marketing

Tags : Cold Calling, Cold Calls, Marketing, Sales, Selling

Cut The Costs Of Finding And Managing Leads

Posted by Linnea Blair on

09/13/2006

Every organization with a sales force keeps an eye on the leads it generates – how many does each salesperson get and how many are converted into customers. But as most companies now appreciate, the costs of generating and converting leads need to be carefully managed or they can become a real drain on profitability.

The basic tasks of lead management are to lower the costs of lead acquisition while at the same time increasing the rate of conversion into customers. To do this it’s best if you separate the lead-getting activity from the selling activity and develop metrics for monitoring each. The two are actually separate functions and require different sets of skills and resources. Lead-generation is a marketing function, while the job of converting those leads to customers is a sales function.

Lead quality is essential

Leads are acquired in any number of ways. For marketers who purchase prospect lists the content and quality of the list should be far more important than the cost, yet how many lists are bought on the basis of price? The answer is, far too many. Those who specialize in lists know that good lists are worth what they cost. They’re regularly updated, their data is accurate, and it’s possible to nominate prospects by geographical area, by age, by occupation, or any other profile that will allow the sales team to target suitably qualified prospects. You don’t have to pay for a huge list if you’re only a small company or are restricted in your geographical coverage. Carefully targeted prospects are available on a cost-per-lead basis; it’s even possible to rent or buy lists of people who have previously responded to the same form of marketing you intend to use.

The most important metric to monitor is not the cost per lead, but rather the relationship of leads to final sales, by dividing the number of leads purchased by the number of conversions obtained from those leads. The closer this result is to ‘1’ the better the quality of the leads you’ve paid for.

Another way to improve the quality of the leads you get is to have your existing customers provide you with referrals or word of mouth. Referrals are really a way of leveraging off a high level of customer satisfaction and represent a much more likely set of prospects than leads gained from cold calling.

Raise conversion rates

High quality leads make it possible for your sales team to achieve better rates of conversion from leads to customers. This effectively lowers selling costs and will go a long way towards offsetting any additional costs incurred to ensure that lead quality is consistently high. There are many more steps you can take to improve the conversion rate your sales force achieves.

Have a system that assigns a relative value to each lead at the first contact. ‘Hot’ leads are those who are definitely looking to buy; ‘Warm’ leads are those who might buy; and ‘Cold’ leads are probably not interested in buying. Discard ‘Cold’ leads at the outset of the selling process. Concentrate selling efforts on ‘Hot’ leads. Give them priority and only after all the ‘Hot’ leads have been processed should the sales team turn its attention to ‘Warm’ ones.

Leads are often obtained through offers. Before the handover to the sales team the lead should be provided with any information they may have requested – a sales brochure or product order form for example. Have a system that records what was requested and what was provided. Be persistent. One inquiry handling expert estimates that 45% of all leads turn into a sale for someone, but only 22%- 25% actually convert within the first six months. That means that 45 out of 100 leads might eventually convert to customers if they’ve correctly handled.

Keep in touch

Another consideration is that competition usually decreases over time. The reason is simple – most businesses lose interest in a lead if it doesn’t turn into a customer pretty quickly. Patience and ongoing communication will eventually deliver all the conversions you’re going to get, but many won’t convert until several months have passed.

This tells us that every lead management system must accommodate the need to stay in touch with leads over a fairly long period of time. So communicate with leads – perhaps by telephone, email or a newsletter – until they either convert to become customers or must be reclassified as ‘Cold’.

Keep in touch for an appropriate length of time until you’re absolutely certain there’s no hope of ever converting that contact to a customer. Remember too that most businesses have competitors and if you’ve done your prospecting correctly even the people who initially reject you are somebody else’s customers. They may eventually become yours if you don’t give up.

Each member of your sales team will have a conversion rate that shows how successful they are at converting leads to sales. This metric can be used in conjunction with total dollar volumes when you’re comparing the results of individual members of your sales team and determining which salespeople are your top performers.

Information in this article is sourced from RAN ONE, Inc

Categories : Marketing, Relationship Marketing

Tags : Conversion, Leads, Marketing, Relationship Marketing

Protect Yourself From Internal Fraud

Posted by Linnea Blair on

08/01/2006

Smaller enterprises are at the greatest risk from fraud, particularly from within the organization. They’re the least likely to have dedicated security personnel, and most likely to lack adequate internal systems and controls to prevent fraud. You can minimize your exposure to fraud by learning how it’s perpetrated in businesses like yours. There are also policies you should put in place to prevent fraud from occurring. We’ll start with the two most common types of fraud, fake invoicing and cheating on expense accounts.

Fake invoicing

These common frauds are usually along the lines of an employee sending his own company a false invoice which is approved for payment. The employee receives payment that is thought to have gone to a legitimate supplier. The employee simply sets up a company as the fraudulent supplier, establishes a bank account for that business, and then begins sending invoices to his employer.

Frequently the employee has signature authority over the invoices that are sent, so approval is easily accomplished! It’s also possible that the employee is working corruptly with another employee to get the invoices approved. In any event, the company pays for something it never received.

There are variations to this type of fraud in which goods are actually supplied but the ‘vendor’ (the employee’s company) is overpaid for what is delivered. There are also instances where a third party colludes with the employee to overcharge for goods and refund a portion of the price to the employee.

Expense account frauds

In any business there are likely to be a number of employees with the authority to incur expenses on behalf of the company for which they will be reimbursed. These can vary from insignificant amounts, such as for postage and stationery items, all the way up to airfares and accommodation costs for sales staff.

Expense account cheating usually takes the form of wrongly describing the expense incurred or overstating it. Some expenses may have never happened, or were for personal use and not business related at all. Because it’s fairly easy these days to create ‘dummy’ invoices on a home PC, simply having a receipt doesn’t necessarily prove that expenditure actually took place. It’s also possible to copy a genuine invoice and increase the amount or change the details on it.

Well administered policies are the best defense

Fraud is difficult to prevent and often very hard to detect. The best way to combat workplace fraud in a smaller enterprise is to have suitable policies in place and to unfailingly enforce them.

To deter employees from submitting fake invoices, payments should never be made to suppliers that aren’t approved by the owner, nor should a sudden increase in the amounts purchased from any supplier be allowed to happen without a valid reason.

All suppliers should be qualified before any orders are placed with them or payments made to them. This includes having full details of ownership and trading references that verify a history for the business.

Expense account frauds aren’t easy to stop, but once again having appropriate policies and enforcing them will help reduce the possibility of fraudulent claims being submitted. The most basic policy is to pay only for expenses supported by original receipts; photocopies or reprints should never be allowed.

Review the amounts of all expenses and be alert for overcharging or duplication. Be aware of every employee’s responsibilities and their need to incur expenses to meet them. If an employee’s claims show a sudden increase, be sure to query them for the reason as quickly as possible. Experience shows that if they get away with a fraudulent claim once, they’ll almost surely try it again.

Information in this article is sourced from RAN ONE, Inc.

Categories : Business Operations, Employees, Financial Management

Tags : Employee Fraud, Financial Management, Internal Fraud

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Author Archive for Linnea Blair – Page 10

Finding Your Niche

Drumming Up Business During Slow Times

Realizing the True Value of your Business

What’s next?

10 Reasons Why You Should Become an On Target Business

Good Business Deeds Can Be Good Business Deals

Find Your Niche and Market To It

Don’t Freeze Making Cold Calls

Cut The Costs Of Finding And Managing Leads

Protect Yourself From Internal Fraud

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