April has brought some changes that could mean you see an increase in your business energy bill this month. As well having their immediate impact, these increases should also be a wake-up call to start thinking ahead when it comes to energy if you're a business owner or decision maker.

Image by Matt From London via Flickr.

So what has changed? Three things:

1. CRC Energy Efficiency Scheme

The CRC Energy Efficiency Scheme (previously known as the Carbon Reduction Commitment), is a government scheme to improve energy efficiency and reduce the amount of carbon dioxide emitted by large public and private sector organisations. If your business comes under the scheme, then this month you need to buy an allowance to cover your forecasted carbon emissions for 2011/2012 - at a rate of £12 per tonne of carbon.

You should also be aware that there are new proposals from DECC to simplify the scheme, particularly focussing on cutting the adminstrative cost for businesses. Businesses are free to comment on these proposals - a formal consultation is running for 12 weeks from 27 March 2012. The government will then amend the legislation by April 2013.

2. Climate Change levy (CCL)

The Climate Change Levy (CCL) is a tax which all businesses (bar a few exceptions) pay on each unit of energy they use. 

On 1st April 2012, CCL went up: the rate for electricity rose from 0.485 pence per kilowatt hour (kWh) to 0.509 pence per kWh; the rate for natural gas rose from 0.169 pence per kWh to 0.177 pence per kWh. For a typical business using 25,000 kWh of electricity and 5,000 kWh of gas a year, this will add an additional £6.40 to the annual bill and take the actual cost of this levy to £136.10 a year.

3. Gas transportation charges

All energy suppliers have to pay transportation charges to cover the cost of providing and maintaining the pipes that carry gas to customers. These charges make up about 15% of your energy bill.

LDZ gas transportation charges went up on 1st April 2012: the average change for East of England was 3.6%, for London 7.1%, for the North West 7.4%, and for the West Midlands 4.3%. Directly or indirectly, these increases will be passed onto businesses.

These three possible price increases are just a snapshot of the wider landscape when it comes to business energy.

There are numerous schemes, changes, charges, levies and costs which will have an impact on your bill, and that's leaving rising wholeale energy prices aside.  It’s not enough to just choose an energy supplier then sit back and ignre your bills - businesses need to be proactive in every area and make sure that they're doing everything possible to offset these costs, both now and in the furure.

Of course I'd say this, but one way of doing it is by getting the most competitive tariff you can. For an average customer, the least competitive unit rates on the market were around 70% higher than the cheapest rates available last year. As a result, switching to a new tariff and/or supplier can make a huge difference to your bills and, most importantly, your bottom line. Give us a call on 0800 688 8568 to find out more.

For more information on the Climate Change Levy visit our partner company Business Juice. 

‘A bucket list for my business? What?!’

Image by cakeyhamburger via Flickr

The concept of a bucket list is probably nothing new; you might well know it from the film starring Morgan Freeman and Jack Nicholson where two terminally ill men suffering from cancer escape from a hospital ward and head off on a road trip with a wish list of to-dos before they die.  A very funny film which ends, as you would expect in tragedy. 

The idea of a bucket list for your business might seem a bit strange, perverse even. However, this isn’t a collection of fun experiences to have before you go bankrupt, it’s a list of steps you can take to stop the rot and get your business on track.

This list isn’t going to solve all your problems by any means, but hopefully it  may just give you some food for thought when it comes to reducing your overheads, cutting costs and getting your business back in the black.

1. Cut the money you pay for your gas and electricity

As you would expect from a commercial energy broker this one has to be top of the list or I wouldn’t be doing my own business justice. 

Far too many businesses pay over the odds for the gas and electricity that they use. Often business owners don’t appreciate that they do have a choice and that they don’t have to accept renewal prices that are thrust at them by their existing supplier.

Money saved here will go straight on your bottom line. Remember - revenue is vanity, profit is sanity! Give us a call on 0800 688 8568 or get us to call you to find out more.

 

2. Look at your insurance products when they come up for renewal

You might be surprised how many different elements you have to your business insurance: 

• public liability,

• employee liability (mandatory),

• premises (buildings cover),

• motor vehicle (might be mandatory),

• employee travel (if your employees go abroad),

• fidelity guarantees,

• key person,

• contents cover,

• stock,

• plant and business equipment,

• goods in transit,

• money (if you handle cash, cheques and other negotiable documents),

• trade credit,

• engineering,

• business interruption,

• product liability,

• professional liability,

• directors and officers. 

This list isn’t exhaustive; what cover you need depends on what type of business you have. But it is easy to see that these things can easily get out of control. Start digging out that paperwork, make sure you know what you need and what you don’t. When each policy comes up for renewal make sure you check if you need the policy, then shop around if you do, and cancel it if you don’t.

 

3. Do you have too many staff?

The topic of redundancies is never a nice one. No one wants to make people redundant and you must remember that in the short term it costs more money to make people redundant. 

It is important not to underestimate the devastating impact that redundancies can have on a business, destroying morale and making remaining staff feel insecure. However, if by taking this measure it secures the longer term life of the business then there might always be the opportunity to get those staff back on board once you enter a growth phase again. 

 

4. Hold off from big purchases

If there is some new piece of manufacturing equipment you planned to buy, ask yourself ‘do I need it right now?’ The long and short of the matter is that if you need this equipment then it will need to be bought in order for you to keep trading, but longer you can wait to buy it, the better. 

If you do need, look at other ways to get it. For example, is there a way to finance so you aren’t immediately going to feel the full impact of the purchase? Could you just lease it it rather than buy it?

 

5. My desk is bigger than your desk!

How much space are you occupying? Do you need it all? As much as we would all love to have the windowed corner office on the 20th floor with the walnut desk and private washroom we need to be realistic. 

Think realistically about whether you can squeeze your business into a smaller space. If you can, you could rent out the space you’ve created. This might not be so easy if you don’t own the premises, but on longer term leases you might be fine. Site and data security will need to be catered for, but the idea is worth exploring, even if it’s only for a short period of time.

 

6.  ‘We’re supposed to haggle!’

You may or may not have seen Monty Python’s Life of Brian. But I would like to draw your attention to a scene where Brian is trying to escape some soldiers and runs off to the market place.

Never, ever, ever accept the first price that‘s offered to you. If you were going to buy a new house you wouldn’t offer the asking price would you? Well, not at first anyway.

When was the last time you tried to negotiate rates for the items you purchase from your suppliers? You may have been with them for years but that doesn’t mean you aren’t within your rights to ask for a better deal. 

In theory the worst that can happen is that you end up paying the same price as you are already paying. Here are some haggling tips:

• Don't be afraid to ask. You don’t ask you don’t get. Be explicit about what you want and what you don’t.

• Never negotiate against yourself. If you’ve made an offer, wait for a response before making another offer.

• Get it in writing. As Samuel Goldwyn once said: ‘An oral agreement isn't worth the paper it's written on.’ 

• Know your bottom line. It needs to meet your needs or you might as well not bother. You need to know when to stop and what your drop-dead point is.

• Establish a fall-back plan. Know your best alternative if you face an unsuccessful negotiation. Without a fall-back position, you are left with no alternative but to negotiate until a deal is reached, even if that agreement is unacceptable.

 

7. Talk to someone who knows

Don’t delay, speak to someone who can give you financial and legal advice as soon as your business starts getting into trouble. This will give you time to assess the alternatives open to the business.

You should seek professional advice immediately if:

• you cannot cover your debts;

• the business receives a County Court summons;

• you can't pay staff wages;

• there is an acute lack of working capital.

Your accountant, who may already be familiar with your business, may be able to advise you. But if they’ve allowed to you to get to this position you’re in, you’ve got to ask whether or not they are the right person to help. Don’t be afraid to find someone else who you can have full confidence in. 

 

8. Cash is king

If there are people who owe you money, what are you doing about it? You should be invoicing people as soon as possible and expecting them to pay on the terms which you agreed with them. If the payments haven’t been forthcoming, what have you been doing to follow them up? Once again don’t be afraid to ask. Just make sure you don’t get angry, because that won’t help anyone, especially you. Some basic steps to follow should include:

• make your payment policies clear at the time your services are agreed;

• accept all forms of payment and encourage credit card payment;

• get a deposit in advance;

• always let the customer pay when they offer;

• make arrangements for payment before you deliver the final product;

• follow up every day until you receive your money;

• apply your payment policies to every single customer;

• contact the credit agencies, make sure people know if some is a non-payer.

 

9. Don’t over-trade

Over-trading happens when businesses take on work, but don’t have enough current assets or working capital to meet the needs of the customer. This is usually common in young, rapidly-expanding businesses and it can be extremely serious, even fatal. This problem is often exacerbated because,although you pay suppliers on credit, your customers may well pay you on credit too and it doesn’t take much to upset the equilibrium. (Hence the importance of point eight.)

 

10. When all else fails...

If you have done everything you can to pull in the purse strings and you still can’t seem to sort it out, you have one more option before ending up insolvent. Explore getting a company voluntary arrangement (CVA).

You can use an insolvency practitioner to prepare and negotiate a company voluntary agreement between you and your creditors. This is a breakdown of how and when you need to make repayments to creditors. 

A meeting will be held to present your proposals to creditors; 75% - by value of debts - of the creditors present or voting by proxy must vote in favour of the arrangement for it to be binding on all both you and all the creditors. Recently there have been some changes to insolvency rules that mean the meetings, voting and communications can be made electronically as well as in person. 

You can find an insolvency practitioner with The Insolvency Service which is a quango provided by the Department of Business, Innovation and Skills. 

I hope that you have found the points listed above a useful prompt to think about your business and what you can do to ensure that you stay on track and continue to trade in a successful way.

If I can just reiterate one more thing, it would be please don’t suffer in silence; if you need help ask for it.  Even though things can seem tough, it is possible to recover and thrive again.

Most small businesses will need a loan at some point, it’s rare for someone starting a business to have all the capital they need to get up and running, or to pay for expansion further down the line. Getting the right finance can be a make or break issue for some businesses, so here are some tips to help you find the right loan.

Image by jferzoco via Flickr.

Small business loans: a checklist

When you come to a point where you need a loan for your small business, use this checklist to help make sure you get the right one:

• Know how much you want to borrow and for how long. Really think about how much you need to borrow to get your business where you want it to be. Think realistically about what you can repay and what period you can repay it over. Remember that if you borrow too little and have to change the loan agreement later on to borrow more, there may be charges.

• Bring your business plan. Your business plan will be really useful for showing what you’ll use the money for and how you’ll be able to repay it. (Don’t have one? Find out about business plans and forecasting.)

• Do your homework. It’s essential that you shop around if you want to make sure you’re getting the best deal. (But of course we’d say that - comparing prices is in our nature!)

• Be bold and negotiate. Do your research and make sure you know what’s available on the market. The lender is likely to give you a better offer if they know you’ve found other deals. Don't forget to negotiate over terms and fees as well as the interest rate.

• Always read the small print.

• Choose your security carefully. The lender will ask you you to nominate assets as security in case you’re unable to repay your loan. Avoid using your home as security at all costs.

Other options for small business loans

Many people think that they have to get a small business loan from their bank, but that’s not necessarily the case. There are plenty of different places you can go for finance, which is good news, because it means you’ve got a better chance of finding a loan that will fit you and your business.

One alternative to a traditional loan provider is peer-to-peer lending, where people with money to invest lend their money to businesses that need a loan. Businesses like Funding Circle act as an intermediary and put potential lenders in contact with potential borrowers. Sound interesting? We’ll be back with with more information about peer-to-peer lending networks like Funding Circle in the next few weeks.

See last week's business skills post on tax and VAT.

As a small business owner, you need to be aware of tax rules or face potentially expensive consequences. Here I'll take you through some basics to help you stay on the right side of HMRC...

Image by Images_of_Money via Flickr

Starting up? Inform HMRC

When you become self-employed or start a new business, you must inform HMRC within three months or risk a fine.

If you have an accountant you should tell HMRC this too; you  may have to fill in a form authorising him or her to act on your behalf on tax matters.

Deciding your accounting period

One of the first decisions you need to make is your accounting period. Unlike personal tax, as a small business you can choose the date your accounting year ends.

Unless you have a good reason to do otherwise, however, the simplest option is to make your accounting period coincide with the tax year.

In the year in which you start, you will be taxed on the period between your start date and the next 5th April. (The end of the tax year.) This period is known as your basis period.

Your main tax liabilities

There are three main taxes that you need to be aware of: personal tax, corporation tax and VAT.

1. Personal tax

Your personal tax liability depends on how much salary you choose to pay yourself from the business. You will have the normal personal allowance that you don't have to pay tax on . ( For 2011-2 this is £7,475, for 2012-3 it will be £8,105.)

What you'll pay: you pay 20% tax on earnings up to and including £35,000 (£34,370 for 2012-3); 40% on earnings of £35,001-£150,000 (£34,371-£150,000 for 2012-3) and 50% on earnings over £150,000.

2. Corporation tax

Limited companies and organisations including clubs, societies, associations, co-operatives, charities and other unincorporated bodies pay corporation tax on their taxable profit. You can deduct a variety of business expenses and capital allowances, but you have to calculate your own company's tax liabilities, which is why a good accountant is such an asset to a small business.

Corporation tax has to be paid nine months and one day after a company's normal due date - usually the last day of the annual accounting period.

What you'll pay: in 2012, you'll pay 20% on profits of up to £300,000 (the Small Profits Rate), and the Main Rate for profits of over £1,500,000 is 25%. There is also a 20% rate for unit trusts and open-ended investment companies. (See HMRC for more information.)

3. VAT

You must register for VAT if your annual sales are over £73,000. It's sometimes a good idea to register voluntarily if your turnover is lower than this: for example you can still claim back VAT on purchases even if you don't make any sales in an accounting period.

What you'll pay: The total VAT charged on invoices to your own customers, minus any VAT you've paid out on essential purchases. There are also several VAT accounting schemes which could save you time and money - see HMRC for more information.

Completing your company tax return

Once a year you or your accountant will have to complete a company tax return form (form CT600) and file your accounts at Companies House. Bear in mind:

• it's your responsibility, not your accountant's, to ensure the information is correct - you will have to pay penalties for mistakes;
• you should keep all your records for at least six years, including receipts and invoices;
• the deadline for sending in the return is either 12  months after the end of your accounting period or three months after you recieve notice to deliver a company tax return, whichever is later;
• if you file your tax return late, you may have to pay interest on your tax bill or even a fine.

Tax liabilities for sole traders and partnerships

For sole traders, any profit after the deduction of allowable expenses is taxed as income.

If you are in partnership with others, your tax situation is similar to that of a sole trader. However, you will need to fill in a separate return for the whole partnership, which divides up the partnership profits in-line with how each partner earned that money. After that, each partner must complete their own individual tax return declaring their share of earnings from their partnership.

See last week's business skills post on setting prices for you product or service and come back for next week's post on small business loans and finance.

Setting your prices too high can drive your customers away, but charging too little could leave you in the red. Learn more about pricing strategies in small business and find out how to set the right price for your product or service.

Don't price yourself out of the market. Image by fsse8info via Flickr.

Setting the right prices for your product or service is essential to your business's success. To come up with appropriate numbers, you need to look at three factors:

1. Your costs.

2. Potential demand.

3. What your competitors charge.

I'll now look at each of those three factors in turn.

1. Your costs.

There are two basic kinds of costs you need to calculate - your variable costs and your fixed costs.

Variable cost is the price per unit of your product, and it takes into account factors like:

• the cost of manufacture,
• package and shipping,
• import duties,
• credit card fees,
• warehousing costs.

It's always a good idea to make sure your pricing covers your variable costs.

You will also want to take into account fixed costs, like:

• staff salaries,
• rent,
• utilities,
• insurance,
• loan repayments,
• marketing costs.

You can check if your pricing is on track by multiplying your total price per unit by the number of units you estimate you can sell in a year. The figure you get should cover all fixed costs and variable costs and still leave you a reasonable amount of profit. Keep in mind that while your variable costs will often go down the more you sell, you should be conservative in your sales projections. This will lessen the risk that you won't be able to cover your costs.

2. Potential demand.

You need a good idea of how many sales you can expect in order to set the right price for your product or service.  This is called a sales forecast or demand forecast, and there are a number of different methods you can follow to generate one, from making an educated guess, to more complex quantitative techniques which use historical sales data or data from test markets. What method you use will depend a lot on what stage your business is at; if you're just starting up, historical sales data won't be easy to get hold of!

As a starting point, you could make an educated guess and ask other people in your business to do the same to get a consensus. If you have a sales team, you could also ask them what they would realistically expect to sell each month. Another idea might be to do a customer survey to find out about their purchasing habits. You can find out more about sales forecasting on the BusinessLink website.

3. What your competitors charge.

It's essential to know what customers are willing to pay and you can get an idea by looking at competitors' rates. Carrying out market research or holding focus groups can also help you establish a reasonable price.

If your customers are likely to buy your product or service based mainly on price, looking at what your competitors are charging will help you to avoid pricing yourself out of the market.

Charging less than your competitors may look like a good way to gain market share, but there are some potential pitfalls. If your competitors are larger or better established, it is likely their costs per unit are lower than yours. It may be a better idea to develop other selling points. You should also keep in mind how you plan to position your product in the marketplace. There are many situations where you can charge more than the competition. For example:

• if you're selling a luxury product, pricing below the competition might make customers think your product isn't as good;
• you can charge more for a unique product that people can't get elsewhere;
• many customer will pay more for great customer service;
• if you have a brand that people know and trust you can charge a premium.

You might want to consider using price discrimination to maximise your sales - charging different prices to different customers. For example, you may offer a discount to students on a product that is usually too expensive for them, in the hope of reaching a wider market.

You should also think about price fluctuation in the market. For some small business, demand is seasonal. Raising your prices during peaks or offering off-season discounts may be a good pricing strategy if demand for your product changes significantly throughout the year.

Take a look our previous business skills post on PPC for small businesses and don't forget to come back next week to learn about tax and VAT.

Search engine optimisation (SEO) is a way to try and make sure that your website has a good ranking when people use Google/Yahoo/Bing etc to search for a keyword that’s related to what you do.  

Here’s a quick explanation of what I mean by keywords and rankings if you’re not familiar with the terminology - a keyword is a word or phrase that people search for that’s relevant to your business. Let’s use the example of a florist in Leamington Spa: relevant keywords might be ‘florist Leamington Spa’ or ‘flowers delivered Leamington Spa’. Your ranking is where you come on the search engine results page (SERP) e.g. first on the page, second, third etc.)

If you optimise your website for search by targeting specific, well-chosen keywords, you’ll get higher rankings which will mean more visitors to your site.

If you have an online shop it’s pretty obvious why this is important. However, even if you don’t do ecommerce, SEO can have a positive impact on your business. If people need a product or service it’s very likely that they’ll go online to look for it, even if they intend to buy it in person. For example, to go back to our florist in Leamington Spa, if they were to rank at or near the top of the list when someone searches for a ‘florist Leamington Spa’, they could expect greater footfall in their shop because of the increased exposure their business gets. 

SEO is big business and it can be complicated, so naturally, I can’t explain all the ins and outs in one blog post, or give you a definitive set of rules for SEO success. Instead, I’ve put together a checklist to help make sure you get the basics right. I’ve tried to keep things simple, but if you’re not technically-minded you could run through this list with whoever built or manages your website for you.

Make sure you’re using Google Analytics and Google Webmaster Tools.  

These tools are free and easy to install and use. They give you lots of information about your website’s performance, for example how many people visit it, how long they spend on the site and how well you rank for different keywords. With Google Analytics and Google Webmaster Tools you’ll be able to see the difference made by any chnages you make. Google Analytics has a nice feature called annotations which lets you make a note on the timeline if you make a change to your website - this makes it even easier to keep track of your progress.

Make and submit a sitemap.

If your website doesn’t already have a sitemap then you should make one. Once you’ve done that, submit it to Google Webmaster Central and Bing Search Webmaster Tools. This is an important step to help make sure your website can be found by search engines.

Find out what people actually search for.

Use Google AdWords Keyword Tool to see how many people search for different keywords in the UK. It will suggest keywords you might not have thought of. One tip - make sure you check the box that says ‘exact’ and uncheck the box that says ‘broad’. 

Use your keywords in the right places.

Once you’ve researched your keywords and chosen the ones you want to target, you need make sure you’re using them in the right places on your website. You should try and include your keyword(s) in the:

• title tag,
• meta description,
• H1 (the title),
• URL,
• the text on the page itself,
• image filenames,
• alt tags on images.

You shouldn’t just cram in keywords all over the place though - the search engines are smart and can penalise you for trying to cheat. Also, the most important thing is to make sure your website is interesting and makes sense to real people - they won’t click on your link on the results page or stay on your website for long if you’ve got a lot of meaningless phrases instead of real copy. 

The title tag and meta description are arguably the two most important things to get right because they act as an ‘advert’ for your website on the results page. In this example, I've searched for 'flowers delivered Leamington Spa'  - the keywords are all there but the title tag and meta description are readable too, plus there's the offer of free delivery as an extra encouragement to click:

Make sure you’re included in local search.

If there’s a local element to your business then it’s a really good idea to add your business to the local listings of the major search engines. The most important one is Google Places. With Google Places you can really help your business to stand out -  your address and phone number will feature on the results page, you can show up on Google Maps, you can add photos, videos or special offers and customers can leave reviews. And it’s all free!

Add interesting, relevant content.

More content means you can target more keywords and there will be more chances for people to find your website. It might be a good idea to create a few pages dedicated to targeting important keywords. Try to add content that your customers need or will find interesting - think about what questions you get asked and what’s important to your existing customers. So for example, our fictitious florist in Leamington Spa, knowing that potential customers are searching for ‘wedding flowers Leamington Spa’, could create a page all about wedding flowers, explaining what they can provide, with images and customer testimonials. 

Get people to link to you.  

The number and kind of links you have coming into your website will make a big difference to how well you rank for your chosen keywords. Think about who you can ask to add a link to your website from theirs - friends, family, trading associations, other businesses you work with. The anchor text (the words that they use to link to you) are important - try to make sure that whoever links to you uses your business name or one of your keywords as anchor text, rather than something like ‘click here’ which doesn’t relate to your business.

So that's my checklist of SEO basics, if you found it helpful I'd love for you to share it. If you've got any SEO tips or advice of your own, leave a comment.

As I said at the start of the post, this is really just an introduction - here are some more articles and tools that might be useful:

• SEO tips from Google - straight from the horse's mouth
• SEOMoz's excellect beginner's guide to SEO
• Advice on SEO for small business sites
• Google AdWords Keyword Tool
• Google Analytics
• Google Webmaster Tools
• Google Places
• Bing Webmaster Tools

See last week's business skills post on setting up a website, and don't forget to come back next week for our post on PPC for small businesses.

The internet gives you the opportunity to do business with millions of people all around the world, 24 hours a day. Can you afford to miss out?

Image by lecasio via Flickr

In this day and age almost all businesses need to have some kind of  online presence. If you're not online, you're invisible to the millions of people who go online everyday to look for the products and services they need.

You don't necessarily need to have an all-singing, all-dancing ecommerce website (although if you have a product to sell it could be a good idea.) It could be a simple one-page site that tells potential customers who you are, where you are and what you do.

Setting up a website

Most small businesses don’t want to devote time and resources to building a website from scratch themselves. However, if you just want a simple site, it's a lot easier than you think; platforms like WordPress, Moonfruit, Weebly etc make it incredibly easy to get a basic website up and running. Ebay and Etsy make it really easy to sell your products online too, and can be a good way to dip your toe and see what demand is like before you launch your own ecommerce website

If you are thinking about an ecommerce site, there are two straightforward ways to get one up and running:

• Use a template-based ecommerce website. Some web hosting companies offer ready-built ecommerce web sites, with basic product page templates to which you can add product pictures, information and pricing, and a shopping basket facility. These also include a checkout facility enabling customers to make payments using a variety of methods such as credit or debit cards.

• Get a custom built ecommerce site. A more expensive alternative is to employ a professional web design company to build you a bespoke ecommerce site. If you choose this option you can customise how the website looks (to match your existing website if you have one) and choose extra services such as order tracking if you need them.

Selling online: the legal issues

When you sell online you have to take care about what you offer and how you handle the data your customers share with you. There are several important laws that have special relevance to selling online, including:

• Distance Selling Regulations

• E-Commerce Regulations 2000

• Electronic Communications Act

• Disability Discrimination Act

There’s more information on these laws and regulations on the Business Link website. If you’re in any doubt about the how they apply to your business, you should consult a lawyer.

Taking payments online

Most customers will want to pay for their purchases using a debit or credit card, and unless you use a template-based ecommerce package which includes a payment system you will need to make your own arrangements for taking payments.

The easiest way for new or small businesses is to take payments through a specialist payment service provider such as PayPal. During a transaction your customer is transferred to a secure site where the provider processes the payment on your behalf – for a fee.

You may also be able to set up your own merchant account with a card company through your business bank, allowing them to accept payments directly. If your business has a high volume of transactions this is usually the cheaper option.

When evaluating either of these types of services, consider:

• how much it costs to set up the service;

• the percentage of each transaction that will go to your card company or processor;

• any per-transaction fees;

• any fixed monthly fees.

Fulfilling online orders

After customers buy your goods or services online, you can choose to pick, pack and despatch each order yourself, or you can use the services of a fulfilment house to carry out some or all of these functions for you. The advantages of using a fulfilment house include:

• no need to distract yourself from management tasks or take on extra staff;

• no need to provide your own warehousing space;

• flexibility to cope with very busy periods.

Customers will expect you to email them when goods are dispatched, with a consignment or tracking number where applicable. If you decide to use a fulfilment house, check that they can do this for you as well.

Online customer service

If you are doing business with customers online, it makes sense to use your website to handle a significant part of your customer service function. Allowing customers to find the information they need themselves is likely to be much cheaper for you than providing it over the phone, and can be much faster and more convenient for customers, especially if they are overseas or if they need help at unusual hours.

So consider including on your site:

• downloadable product manuals; 

• a list of frequently asked questions and answers (known as FAQs);

• how-to instructions to support your products or services – these could range from factsheets to instructional videos, depending on the complexity of your products;

• troubleshooting tips;

• parcel tracking: this can include links to courier company websites so that customers can find out where their goods are quickly and easily.

There's obviously more to doing business online than this - this post is just intended to give a quick oversview. Later in the series we'll have lots more posts with information on ecommerce, online marketing and more.

There's no business skills blog post next week, but we'll be back in the new year with a post on setting up a business website.

See last week's post on choosing a business bank account.