Entrepreneurs are in the business of selling something, whether it’s a product or service, which means you can’t afford to ignore customer satisfaction. In order to understand how customer satisfaction impacts your business, you have to measure it, and this is where most companies begin wandering off into unhelpful territory. If you want a real (and perhaps very sobering) view of customer satisfaction, read on.

Frederick F. Reichheld is a customer loyalty guru and a Fellow at global management consulting firm Bain & Company who cracked this difficult nut in his Harvard Business Review article, The One Number You Need to Grow. What he lays out is a very compelling case for what question you should be asking your customers, the scale you use to measure it, and the way you interpret the results. 

Every company wants to see great customer satisfaction scores, which inevitably leads them to include people who are only barely satisfied in their count of those who are satisfied. This simply isn’t helpful because those barely satisfied customers are highly likely to switch to a competitor and aren’t serving as brand ambassadors. Reichheld argues you have to begin by asking the right question, which is this: “How likely is it that you would recommend [company X] to a friend or colleague?” That’s it – that’s the only question you need to ask because it gets at the key customer-related driver of growth and profitability, which is customer loyalty, not satisfaction per se. Your most loyal customers are those who are willing to recommend your company to others.

Now comes the response categories, and the recommendation here is to use an eleven-point scale numbered zero to ten, where zero is the negative end of the scale (not at all likely to recommend) and ten is the positive end of the scale (extremely likely to recommend). People intuitively understand this kind of scale. The zero is obvious, and then respondents are left with a ten-point scale, and people rank things out of ten all the time. It’s easy and intuitive. 

Then comes the part where you interpret the results. Keep in mind there are two goals here: To identify the people who are your most enthusiastic, loyal brand ambassadors and to avoid the grade-inflation that makes most measurement attempts worthless. Reichheld argues for grouping respondents into three categories. Those who give answers of nine or ten are the gold standard. They are your active promoters. You want all your customers in this category. Those who give a seven or eight are passively satisfied, so while you benefit from them purchasing your product or service, they aren’t actively engaged in promoting your brand. Everyone who gives a six or lower are interpreted as detractors. They are not only likely to switch to competitors but might even be angry and actively working against your company.

The one number you need to grow is your net-promoters score – the percentage of your customers who are promoters minus the percentage of customers who are detractors. When you find ways to increase your net-promoter by simultaneously reducing the number of detractors and increasing the number promoters, your company will grow. 

If you’d like a more detailed treatment of this topic beyond the HBR article mentioned above, you might be interested in Reichholds related book, The Ultimate Question 2.0.

One of our previous articles highlighted 5 Things That You Need To Be An Entrepreneur. It could have listed dozens if not scores of other useful things entrepreneurs need to have in order to be successful. Today it’s time to tackle one many people would rather not deal with at all: Time management. If you’re cringing right now, it’s probably a sign you need to keep reading. There are only 24 hours in a day, so here are 5 time management hacks to get the most out them:

1. Don’t Shortchange Yourself

Don’t try to squeeze more out of your day by giving up sleep, nutrition, or exercise because you’ll end up doing more harm to your time management than good. Peak performance on a daily basis for the entrepreneur can’t happen if your body isn’t in tip-top shape, which means getting enough sleep, eating a healthy diet, keeping yourself hydrated, and exercising on a regular basis. Shortchanging your health will only serve to cancel out all the other time management hacks on this list. 

2. Know Your Baseline

If your time management skills aren’t what they need to be, it’s worth doing an assessment so you know what you’re dealing with. MindTools has a handy online survey you can use: How Good is Your Time Management? You’ll find out if you just need a few tweaks or a major overhaul.

3. Prioritization Counts

When you’re sitting there looking at the list of things you need to do, how choose where to start? Your project management software can’t do this for you – you have to decide. This can be a major hang-up for many entrepreneurs. There are many ways to do this, which means you might end up trying several methods before you find the one that’s going to work for you. You can try author Stephen Covey’s (7 Habits of Highly Effective People) Time Management Grid, which is actually a modified version of the Eisenhower Matrix. For several more ways to prioritize, check out this article on the process.st blog.

4. Distraction Elimination

To get serious amounts of work done, you have to first establish some “sacred” blocks of time devoted solely to that. Some people make it an entire day while others carve out chunks of time on a daily basis. But it’s only going to work if you eliminate distractions, which means fully “unplugging” from social media, phones, email, and the Internet as a whole. It may also mean finding the right physical place as well – probably not the office.

5. Manage Your Workflow

Once you have the time and space to focus in on plowing through your tasks, you still need to actively manage your working time to get optimal results. One way to do this is optimize short breaks that boost productivity and keep you focused. Try Francesco Cirillo’s Pomodoro Technique, which has you working in 25-minute chunks punctuated with five-minute breaks.

Any entrepreneur can seriously up their game with these five time management hacks. You’ll turbo-boost your own productivity, and your business will reap the benefits.

Having your business on the cloud makes having strong security a top priority. Concerns about security are one of the big drivers behind the rise of hybrid clouds, as IT managers seek to navigate a happy medium between the cost savings represented by the cloud and the potential risk it brings. Moving to the cloud does introduce some new security concerns, but like any calculated business risk, these can be managed with a sound plan. Here are five steps you can take to help you keep your company’s cloud secure.

Get Professional Assistance

One of the most important steps you can take to secure your company’s cloud is getting help from a security expert. Securing every aspect of your cloud can be a complex process and is best done with input from experienced professionals. Whether its for help with threat intelligence analysis, securing public clouds or overall operational security, seeking assistance from a cloud security specialist will help you save time and avoid hassles.

Don’t Store Unneeded Data

If you don’t need data, don’t store it, says the PCI Security Standards Council. Many businesses collect information they don’t really need to maintain in their records, such as employee Social Security Card numbers and customer credit card information. By not collecting and storing unneeded information in the first place, you automatically eliminate a major security vulnerability. Avoid storing cardholder data and card verification codes, don’t print out data that doesn’t need to be printed and don’t leave servers with sensitive information physically unprotected or in the presence of unauthorized personnel. Use payment-enabled software or a third-party online payment processor to eliminate the need to collect credit card information.

Use Encryption and Strong Passwords

Strong passwords with long character strings and a mixture of small and capital letters, numbers and symbols should be a basic security step for securing all areas of a network, including easily overlooked vulnerabilities such as router connections.

Likewise, encrypting stored and transmitted data should be a standard practice. Make sure you secure your data at all points along your network, from the time your customers transmit it over your network all the way through exchanges with other communication channels such as email. Depending on how you collect and use data, you might choose from a variety of encryption options, including data-at-rest encryption, TLS/SSL encryption or an iterative cryptographic hash. Be sure your encryption is properly configured. Use good key management tools and procedures to optimize your encryption handling.

Keep Your Security Up to Date

Outdated operating systems and software apps leave your system more vulnerable to security holes hackers can exploit. Keep your security up to date by using the latest versions of operating systems and apps and a good antivirus program. Make sure all parts of your network as well as all devices connected to your network are secure. A single compromised device can introduce a virus into your entire system. If your employees use BYOD devices, make sure they follow your company security policy.

Schedule Automated Cloud Backups

One of the most crippling consequences of a security breach can be the loss of invaluable company and customer data. Mitigate this risk by scheduling automated cloud backups using an enterprise-grade cloud backup service. You can further harden your backup procedures by supplementing your cloud backup with physical backup procedures such as using discs, tapes or external drives. A best practice is to make three backup copies using two different media with one copy stored in a separate physical location in the event of an on-site disaster.

Debt is an unavoidable part of starting and running a business, and managing debt effectively has large ramifications for your business’s bottom line.  It’s good to be on a firm financial foundation before you start your own small business, as inevitably your personal and businesses finances will become mixed.  Half of small businesses fail in their first 5 years largely due to insufficient capital, poor credit arrangements, and too much debt .  It behooves you to have minimal debt when you seek financing, as you will have less stress overall and will be able to put more capital in your business.  This is rarely the case however, as 49% of small business owners are in major debt while 75% of startup capital comes from credit cards, bank loans, and lines of credit.  Managing all this debt is difficult, and many entrepreneurs struggle to find an effective way to reduce their debt load.  Let’s explore some strategies and principles to evaluate how you manage your small business debt.

How do we Manage Debt?

Debt is everywhere in the United States.  For example, nearly 70% of Americans own at least one credit card and most have more than 1.   However, most people don’t know how to effectively pay off their loans.  The most effective way to manage debt is to pay off the loans with the highest interest rates first.  Staggeringly, of those surveyed, only 3% of individuals allocated money in a near optimal way.  Most individuals instead focus on repaying their smallest loans first, in an effort to reduce the number of outstanding loans they have.  This is called being “debt account averse,” where instead of reducing your total associated cost of financing you focus on reducing the number of debt obligations you have.  Why is this?  There are three explanations for this behavior:

1. Prospect Theory: Individuals are much more sensitive to a loss than a gain of an equal amount. The urge to get accounts back in the black as fast as possible is greater than the urge to analyze interest rates and calculate the optimal pay-off plan.
2. Goal Gradient Theory: Individuals are motivated by a salient goal. For example, when coffee shops hand out free coffees after a certain number of purchases, they are encouraging you to buy more coffee than you normally would by using an artificial goal. People find it easier to pay off small debts first, and get more satisfaction from paying them off quickly.
3. The final reason is that people often don’t understand how interest rates work or how to organize an optimal pay-off plan. It’s hard to visualize how your debt load changes over time and its effects on your business.

Are you Liable for Your Business Debt?

Personal liability is always a complicated issue when it comes to small business.  If you are currently handling liability issues with outstanding debt, it is always best to consult with an attorney to get advice for your particular situation.  With that said, let’s take a look at typical arrangements you find in small business financing. 

Sole Proprietorships and Partnerships

In this legal structure, you and your business are legally the same, therefore you are personal liable for all your business’s debt.  Your partners are also liable for the business’s debt, and not proportionally—your creditors can take your partner’s personal assets to pay off all the business’s debts.

Corporations and LLCs

You and your business are separate legal entities in this arrangement.  In theory, you have no personal liability for your business’s debts but this is not always the case.  It’s difficult to build a perfect wall between your personal and business finances.  Here are ways you can become personally liable for your business debt: 

How to Reduce your Business’s Debt Load

Entrepreneurship is perceived as a risky endeavor, where you have to bet everything while fighting tooth and nail to start a successful company; to quote Ray Kroc, founder of McDonalds, “…if you’re not a risk taker, you should get the hell out of business.”  Does this still hold true, however?  Is entrepreneurship still a risky career path with low job security?  Over the past couple decades, the classic entrepreneur-employee, high risk-low risk paradigm has reversed.  It used to be that employers had large benefits packages, offered pension plans, or valued seniority and tenure.  These qualities are increasingly rare, and we find that entrepreneurs consistently have more independence and financial security.

Job Security as an Employee

The economy is undergoing a lot of changes as the marketplace becomes more volatile and digital technology disrupts classic business models.  According to the Bureau of Labor, the median number of years a worker has been with their current employer was only 4.6 years in 2014.  When you partition that statistic by age, you find that for 25-34 year olds, their median job tenure was 3 years, nearly three times less than 55-64 year olds, who generally stay 10.4 years at their jobs.  As an employee you can lack agency and are not always in control of your career path.  Who hasn’t seen stories of layoffs and downsizings in the news these days? Companies no longer expect life-long employees, so why don’t you take the opportunity to start your own.

Entrepreneurship Isn’t that Risky

Starting a business has never been easier, cheaper, or more popular than now.  Take this opportunity to decide how you want to spend your time and create value.  Successfully creating a company depends on a lot of factors, but the most important is hard work and effective planning.  Why do startups fail?  The number one reason found by CB Insights was that there was no market need for their product (42% of startup deaths were for this reason).  This could be avoided by applying lean startup strategies: immediately begin doing market research with your prototype product or service.  It doesn’t have to be perfect!  The intent of a minimum viable project, or MVP, is to test and iterate on your idea, incorporating feedback into a continual design process.  From this process you’ll get a much better idea of who uses your product and how.  

For entrepreneurs looking to bootstrap their idea, the rise of computer and internet based tools have markedly decreased the costs for developing a business, giving you powerful tools from the very start.  The community of entrepreneurs in your area is also a great resource, providing networking opportunities, advice and expertise, and a support system as you develop your idea.  There’s no more argument—entrepreneurship is a safe bet for most.  All you need is an idea, hard work, and a willingness to fail and try again.

The Middle Ground

Starting a venture from the ground up can be intimidating, but there are often more structured opportunities, such as franchising.  Franchising is generally thought of in the context of food chains such as McDonald’s, but it is much more than that.  Instead of creating a completely new business model, you can purchase the right to use and improve an existing business model, giving you the security in knowing the process works, but freedom and flexibility to choose the work environment you’ve always wanted.  Franchises come in all shapes and sizes—everyone can find a fit, from Hampton Hotels to Jimmy John’s to Liberty Tax Service and many you probably did not know even existed!  The main benefits of franchising include: