By Carl Faulds

Small and medium-sized businesses face unique challenges compared to their larger counterparts. They usually have fewer resources at their disposal and often face more challenges with cash flow.

However, they have one big advantage: they can take fundamental decisions and change direction much more easily. One change every small business should consider is debt refinancing. But why is this so important?

What Does Debt Refinancing Really Mean?

In simple terms, this means taking out one loan to pay off another. The most important factor, of course, is that the newer loan must be better than the older one: more affordable, more flexible, or capable of being repaid over a longer term to reduce your monthly expenses.

Of course, the first thing you’ll be looking for is a lower interest rate. Even a fraction of a percentage could make a huge difference if you have substantial debts and a long repayment period. If you’ve taken out particularly expensive forms of borrowing–unsecured overdrafts or business credit cards, for example–the difference in the interest rate could be huge.

Your cash flow could also benefit significantly from a longer repayment term, which will have the added bonus of giving you more cash in hand to spend on growing your business. However, be careful: by extending the term of the loan, you’ll hugely increase the total amount of interest you pay, so it’s crucial to weigh the pros and cons.

And of course, we mustn’t forget that if your new loan is larger than the loan it repays, you will have a substantial cash windfall. Investing this money wisely to power your company, while keeping a little back to ensure a smooth cash flow, could be the best business decision you’ve ever made.

What Are the Reasons to Refinance?

First and foremost, you may simply be able to obtain a better deal. In this scenario, your business and its financing needs may not have changed significantly and you could find yourself borrowing a similar or slightly higher amount– but more cheaply.

Alternatively, you might wish to replace one short-term loan with another. However, a word of warning is necessary: it’s very easy to get into a cycle of debt by doing this, even if you save a little on interest by changing providers. In other words, if you’re going to replace a loan with a similar loan, make sure it’s worth the effort and look carefully at other solutions.

In contrast, it could be that your business has changed radically since taking out its last loan. Key milestones include remaining in business for two years (fifty percent of companies fail within five years, so longer-established firms are much more attractive to lenders), generating a six-figure turnover, or reaching a personal credit score of 700 or more. In these circumstances, lenders who previously rejected you could be very interested in taking on your business–meaning you can negotiate far more advantageous terms and save yourself a great deal of cash.

Finally, you might decide to consolidate a number of loans into one more affordable monthly repayment. This will give you access to more capital, simplify your accounting procedures, and hopefully reduce your interest rate, so it’s well worth doing.

Don’t Be Caught by Early Payment Penalties

Before you refinance, you need to bear in mind that many loans carry a penalty for early repayment. This is a way for lenders to make up some of their lost interest if you end the arrangement early, and such penalties can be substantial. Look carefully at all the loans you have and factor in the cost of terminating them before you commit to refinancing. However, if you weigh all the issues carefully, refinancing could be one of the best things you ever do.

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It’s a challenge every B2B business owner has faced at one point or another: those customers who pay invoices at a snail’s pace, causing your business financial hiccups of all types and sizes. At best these delays are simply aggravating or force you to move a little extra money around. In the worst case, though, serious cash flow disruptions can translate into missed payments to your own vendors, jeopardizing your business relationships and even the credit score you’ve worked so hard for.

Luckily, there are business financing options—like accounts receivable factoring—that can help smooth out your cash flow while your customers catch up. Accounts receivable factoring—also called invoice factoring—can be a great solution for small business owners who have incoming revenue on their balance sheet, but need to bridge the gap to getting timely payments.

How It Works

Essentially, accounts receivable factoring means you’re selling your outstanding invoices. An accounts receivable factoring company will buy your receivables by advancing you 50 – 90% of the amount of your total invoice, with the remaining 10% -50% held in reserve. When your customer pays in full, the company will pay you back the amount of the reserve, minus their fees.

Typically lenders will charge a 3% processing fee on the invoice amount, plus a 1% “factor fee” for each week the invoice remains outstanding. Some factoring companies will even assume your debt and manage collections on your behalf for an additional fee.

Accounts receivable factoring is a great option for the small business owner or occasional slow paying customers who need a cash injection to cover operational expenses.

Determining Your Eligibility and Rates

When a factoring company considers how much to advance or loan your company, they take several things into account. In most cases, the larger the invoice amount, the more value it represents and the better the deal you’ll be able to make. Since older invoices are harder to collect on, they are also less likely to qualify for accounts receivables factoring, or may come with a higher factor rate. Because of this, you’re best off reaching out to the factoring company as soon as possible after the account becomes delinquent.

Business owners can expect around 85% of their invoice value from factoring companies, with 15% of the invoice to be held in reserve.

Upsides

Accounts receivable factoring offers your business fast access to cash, even when customers are slow to pay. Although every situation is different, you can often get funds for outstanding invoices in as little as one business day.

Since your invoices themselves serve as the collateral on the loan, no extra collateral is required for accounts receivables factoring. And unlike traditional small business loans, lenders typically don’t require a pile of documentation and information about your business before you can be approved. They simply want to know that taking on your accounts receivables is smart business, so they are only concerned with your outstanding invoices. That makes accounts receivables factoring an attractive option if you have poor credit or have struggled to qualify for other small business loan types.

While not every factoring company does this, some will take on your debt and collect accounts receivables for you. This can be a major advantage if you are in a busy season or if you don’t have the in-house resources to manage collections.

Downsides

Although accounts receivable factoring has lots of upsides, there are also some disadvantages to consider.

When compared with other more traditional small business loan options, accounts receivable factoring is one of the more expensive ways to finance your business. Fast cash is often expensive cash, and this option is no exception.

Although accounts receivable factoring is uncomplicated, it does require you to relinquish some of your hard-earned profits, since you won’t receive the full amount your customer owes you.

For example, if your client’s outstanding invoice is $10,000, you’d be giving up at least $400 in order to collect. Even so, if you’re willing to part with that to access the other $9,600, then accounts receivable factoring may be the right choice for you.

When Accounts Receivable Factoring is the Best Choice For You

Customers who pay invoices at a leisurely pace impact your cost of doing business. Before doing business with a factoring company, you’ll want to make sure that cost is worth it to you and your bottom line.

Like any small business loan, there is no one formula that guarantees which loan is best for your business. That said, some businesses may benefit more than others in using accounts receivable factoring.

Accounts receivable factoring may be for you if your company:

• Has current, outstanding invoices
• Is a B2B model
• Offers payment windows between 30 and 120 days
• Sells products or services on a “final sale” basis. Factoring companies do not work with businesses that sell products on a contingent basis.

While any company with a B2B model can utilize accounts receivable factoring, if you are a trucking, manufacturing, distribution, staffing, or a commercial landscaping company, you may find this loan structure particularly in alignment with your business needs.
Accounts receivable factoring can be a good way to bridge the cash flow gap with slow-paying customers. As always, best practice is to ensure that this financing solution will not only ease your short-term cash flow crunch, but also make long-term financials sense for your business.

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Businesses set up as partnerships, legal entities where two or more people own and run a business, enable companies to benefit from multiple owners’ diverse knowledge, skills, and resources. A partnership is similar to a sole proprietorship, and each partner owns a portion of the business’s assets and liabilities.

With more than one person making decisions and affecting outcomes, different aspects of starting and running the business need to be addressed up front. Although not required, I strongly recommend that partnerships have a partnership agreement in place to detail the business ownership and responsibilities of partners. The clearer and more complete the agreement, the less that is up for debate or disagreement when partners don’t quite see eye to eye.

So, what should your partnership agreement include? Here’s a list of some key items you should definitely think about addressing in yours:

1. Contributions

Make sure you clearly lay out each partner’s stake in the formation and ongoing finances of the business. How much will each partner contribute to start the business and what will each partner’s responsibilities be for future needs? In your agreement, define what each partner will put forth—not only in the amount of money, but also with regard to time, effort, customers, equipment, etc.

2. Distributions

You’re all in the business to make some money and create and sustain a comfortable life, right? Your partnership agreement should detail how the partners will split your business profits? How much will each partner get paid and who will get paid first? Outline not only how profits will be distributed, but also define if each partner will be paid a salary (and of course how much that salary will be).

3. Ownership

What if something changes with regard to ownership of the business? If you sell it, which partners will get what? What is your partnership’s position on taking on new partners? If one partner wants to withdraw from your business, what happens then? What are the options for buying out another partner? Your agreement should carefully describe how ownership interests would be handled in various scenarios like those and others, such as in the event of any partner’s death, a retirement, or bankruptcy. And to protect your business from a partner leaving, setting up a new company, and stealing your customers, you should also consider adding in a non-compete clause. Better safe than sorry!

4. Decision Making

I can’t emphasize enough how important this is! Trust me, you and your partner(s) will not agree wholeheartedly about everything. You need to define how day-to-day management and long-term decisions will be made. Who gets the last say? Identify what types of decisions require a unanimous vote by partners, and what decisions can be made by a single partner. By setting up a decision-making structure that everyone understands and has agreed to, you’ll have the foundation for a more friction-free business.

5. Dispute Resolution

Ugh! No one wants to think about this, but you should. If things get ugly between partners, how will disputes be handled? Your partnership agreement should define the resolution process. Should mediation be the initial step? Will you require arbitration to settle differences? Keep in mind that if a dispute goes to court, lawsuits become part of public record. Setting up how you’ll handle disputes will take the guesswork out of navigating dissention.

6. Critical Developments

Sometimes, the unexpected happens. It’s what makes business so exciting—and unnerving at times. Your partnership agreement should address possible scenarios and concerns, such as:

• A partner getting sick or dying—What happens then?
• A buyout—How will the business be evaluated (and what is the split) if an offer is laid on the table?
• Retirement provisions.
• Circumstances under which you can modify your partnership agreement—and the process for making changes.

These are the most common issues. And there are numerous others you should think about.

7. Dissolution

Your agreement should also include what steps should be taken to legally end your partnership. You might opt to do this if you and your partners can’t agree on the future of your business. Also research what your state requires to dissolve partnerships. State law governs dissolution and your state’s website should define the process and provide the forms you need to complete.

How to Craft a Partnership Agreement

If you do an Internet search for “partner agreement template,” you’ll find a number of samples you might use as a starting point. I suggest getting professional legal help when drawing up your partnership agreement. That will ensure it’s as complete as possible. You’ll want a very detailed agreement that leaves no shades of gray, so each party understands the conditions and requirements.

Well Worth the Time and Effort

Yes, developing a partnership agreement takes some time and some money, but it’s well worth the peace of mind to know you and your partners are on the same page and have the same expectations and understanding about how your business will operate. After several discussions and just a little paperwork, you’ll have a contract that can spare you from potential legal battles and significant hassle in the future.

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If you don’t own a restaurant, do you need to worry about online reviews? You might believe that online reviews don’t really matter to your customers. You may think they’re not worth the time and trouble it takes to manage them. Or you may worry that one bad review will destroy your business.

Think again: Here are 5 good reasons why every small business owner should welcome—and actively encourage—online reviews.

1. The majority of consumers read online reviews. In a survey by Ask Your Target Market, 50 percent of respondents say that before making a purchase, they check online reviews “always” or “most of the time.” Another 25 percent do so about half the time. Just 16 percent rarely check online reviews, and only 10 percent never do.

2. Online reviews affect purchasing behavior. About three-fourths of consumers in the survey say online reviews are important to them. The importance of reviews, and how frequently consumers rely on them, varies depending on what you sell. For example, if you sell technology products, you should know that 70 percent of consumers regularly check reviews before making a tech or gadget purchase. Forty-six percent regularly read reviews for home items; 40 percent read reviews for restaurants, hotels or travel-related businesses; 35 percent read reviews before purchasing clothing or accessories; and 23 percent read reviews for local retail stores.

3. Consumers use a variety of online review sites. The most popular site for consumers looking for online reviews is Amazon. Even if you don’t sell products on Amazon, you should be aware that products you sell may be reviewed there. Also popular: Google, Yelp and even Facebook. In addition, customers may be reading reviews on local sites specific to your region or on sites related to your industry. In other words, getting reviewed on as many sites as you can will help your business.

4. Even though the majority of consumers read reviews, most don’t write them. Here’s the thing about online reviews: A small percentage of consumers are making an outsized impact on the rest. Just 6 percent of respondents in the survey say they always write online reviews after making a purchase. Fifteen percent leave reviews most of the time, and 24 percent do so about half the time. However, 35 percent rarely leave reviews, and 20 percent never do at all.

If you’re not encouraging your customers to write reviews of your business online, you’re missing out on a great way to gain perspective customers’ trust and get them to try your business. What’s worse, the few customers who do write reviews are having a disproportionate effect on what everyone else thinks of your business. Think about it: If hardly anyone writes reviews, one bad review has a much bigger effect than it otherwise would.

Here are some ways to encourage customers to write online reviews:

• Add links prominently on your website where customers can review you on sites such as Yelp.
• Use signage in your location, such as Yelp decals, to let customers know which review sites you’re featured on and where they can find you.
• Include language on receipts, restaurant checks or invoices saying something like, “Find us on Yelp.”

Of course, be sure to regularly read your online reviews and respond promptly to any that are critical.

5. Negative reviews are few and far between. Still worried about what customers might say about you? Don’t be: Nearly half (46 percent) of customers in the survey say their reviews are usually either positive or very positive. Just 3 percent say they frequently leave negative or very negative reviews.

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Every company wants to improve its business accuracy; however, mistakes are going to happen—it’s just a fact. When mistakes do happen, the following actions or inactions will take place:

• Nothing changes; therefore, the same mistake can, and probably will happen again.
• Someone needs to be blamed; therefore, the same mistake can, and probably will happen again. It’s not much different than when the company does nothing.
• A lesson can be learned from the mistake, thereby reducing the possibility that the same mistake will happen again. This obviously is the best option and promotes operational efficiency.

When a business reviews its past mistakes and proactively changes processes or procedures associated with the mistake, potential problems can be prevented from recurring in the future. Taking a proactive approach to mistakes changes the thought process from a temporary fix to a permanent fix.

The following are six approaches to eliminating or reducing mistakes:

1. Eliminate error factors—Redesign processes and procedures where errors have occurred, and eliminate factors that are prone to having mistakes happen again. Workflows should be reviewed to find areas that are weak or outdated to reduce potential errors; areas can also be combined with other processes or procedures to increase overall operational efficiency. Although total error elimination might not ever be achieved in a business, error elimination and error reduction should be a goal.

2. Replace one process or procedure with another—This action involves substituting a process or procedure with a more reliable one. Using new and improved equipment allows technology to achieve more reliable results instead of simply relying on human intervention. A passive approach to processes and procedures is to keep the status quo; a proactive approach—substituting one process or procedure with another—leads to error reductions.

3. Practice prevention—By eliminating or reducing potential errors, “negatives” can be turned into “positives.” For example, safety guards on machines can prevent employee injuries; online forms can have field limiters and checks to ensure accurate data input; computer programs can ask for a confirmation before an item is deleted. Practicing prevention can be implemented in any business. It produces positive outcomes as it prevents costly accidents, increase accuracy and accountability, and improves operational efficiencies.

4. Simplify to improve—Facilitation helps make it easier to not make mistakes. People love simplicity over complexity; the easier a task, the better it will be understood. An example of avoiding confusion in an office might be to color code different forms—print expedited requests on red paper so they don’t get lost in the shuffle with other documents. Data entry can be simplified by using “check-the-box” choices and on-form instructions. There is no need to make something difficult if it can be made easier.

5. Detect first—Detection warns of possible impending problems. For example, parking garages have entrance and exit signs, as well as height warnings; road signs warn of impending danger. Advance preparation through the use of various detection measures can help reduce errors from even happening in the first place.

6. Mitigate adverse effects—Mitigation alleviates the effects of something going wrong. One business might have an automatic shut-off switch for electricity, water, or a specialized piece of machinery; another business might have a computer lockout after a number of incorrect password attempts. Although everything can be done in a business to prevent errors, mitigating the effects of an operational failure is important when an error does occur. Forward thinking rather than emergency fixes is a prudent business philosophy.

Total Involvement

Total involvement of everyone in a business—from owners to employees—can stimulate creativity to figure out ways to prevent errors from happening. Observation, group discussions, and open communication can correct many deficiencies in a business before something goes wrong. Prevention now—peace of mind later!

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There are a number of reasons why customers may decide to abandon your product or service. But if you don’t find out why—and fast—you’ll never know how to keep new customers from sticking around in the future. That’s why we asked eight successful entrepreneurs from Young Entrepreneur Council the following question:

Q. My customer retention rate is declining. What’s the first thing I should do? 

1. Assess the Situation

Ask yourself what their reasons are for leaving. Is your service or product frustrating or difficult to use? Is it too expensive? Is there a superior alternative out there? Then, create an approach to address the most common concerns. You can learn a lot from a simple, honest conversation or email exchange with a customer who is leaving. —Volkan Okay Yazici, Stonexchange

2. Pick Up the Phone

In my businesses, I’ve found that picking up the phone and calling clients goes a very long way–it trumps email any day of the week. Ask people how things are going, what you can do to help, and what problem areas they have that need your attention. You’ll learn so much about your product offering and company in a very short period of time, and customers will really appreciate the one-on-one attention. —Alex Miller, Upgraded Points

3. Check Your Data

Look at your available data to see when, where, and why the decline happened so you can pinpoint a particular set of actions or communications that put customers off. While you can ask them why they decided to leave, it’s important to sift through your data for any patterns in the decline and better understand the problem from inside the organization. —Angela Ruth, Due

4. Find Out if It’s a Product, Customer Service, or Sales Problem

Are you attracting the wrong types of customers? Are you unable to retain good customers because your product inadequately meets their needs? Or is there a fundamental problem with your approach to customer service? Before you start interrogating customers about why they are abandoning ship, find out first if this is an internal problem you can solve quietly. —Firas Kittaneh, Amerisleep

5. Reward Customers for Completing Exit Interviews

Incentivize past customers to complete exit interviews or surveys by offering gift cards or raffle entries in exchange. When someone makes a decision to leave, it’s usually final. But figuring out why they left and fixing the problem can prevent other customers from leaving. Consider the “price” of getting people to do exit interviews/surveys as an investment in keeping your current and future clients. —Dave Nevogt, Hubstaff.com

6. Survey, Discuss, and Take Action

Use periodic customer satisfaction surveys and discussions to find the reasons behind your churn rates. Hire account managers that have experience with account/crisis management. Set realistic expectations on what you are capable of doing so that you have the ability to wow them. Under-promise and over-deliver. —Deepti Sharma Kapur, FoodtoEat 

7. Study Trends

Using analytics and other data sources, look for trends to determine the cause. Oftentimes, numbers will share the story behind the decrease in customer retention. Then perform an audit of your current processes, products, and services to identify how you can improve. This includes competitors since they may offer the same thing for less, or something better. —Marcela De Vivo, Brilliance

8. Turn Off Marketing Spend

While it’s true that you should talk to customers to understand why they’re leaving, there’s a step I’d probably take before that, which is to dial down or turn off marketing spend. Most likely, you’re spending with a certain customer lifetime value calculation, and now that’s changing. So don’t overspend. —Fan Bi, Blank Label

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By Esperanza Denise

Are you suited to be an entrepreneur? Too often, people start businesses not aware they do not have the right entrepreneurial skill-set—they may be too complacent, laid-back, or cautious to take up on the multifaceted role of entrepreneur—which can lead to the failure of their ventures.

Being aware of your entrepreneurial style before launching a startup can help you determine if you’re suited for entrepreneurship.

1. You Are an Innovator

Do you love experimenting with new ideas? If yes, then you are probably a creative soul who loves original ideas. This type of entrepreneur has a knack for blue-sky thinking which often results in creating or inventing revolutionary products. Steve Jobs is one example of an entrepreneur who changed the face of computing with his out-of-the-box approach of thinking.

2. You Are a Risk-Taker

This type of entrepreneur is not afraid to make bold decisions in their business. They take risks as a way to challenge their own methodologies or strategies, and to grow as an individual. With their courageous mindset, they are able to successfully grow their businesses and stay ahead in the game. If you have the ability to face challenges, this may describe you.

3. You Are a Wanna-Be Entrepreneur

You desperately want to be a successful entrepreneur but you seriously lack the talent and abilities to become one. You live in a fantasy world of one day having your own business, but you don’t do anything to get started. You are happy reading success stories about entrepreneurs or watching shows about successful business people and visualizing yourself in the same role. If you identify with this type of entrepreneur, then it’s time to wake up.

4. You Are a Slow Starter

You are serious about starting a business, but you want to be absolutely ready before you take the plunge. It’s important to you that everything is in order, and you want to make sure that the process goes as planned. Much of your time is spent in research and planning, and you’re constantly seeking validation from the people around you. Your constant search for information and second opinions keep delaying from getting started, and in the end you never launch your dream business.

5. You Are a Day Dreamer

Day dreamers are the kind of entrepreneurs who are only seduced by the glamour of entrepreneurship. They don’t want to be bothered with the laborious parts of launching a startup and only want to dwell on what it feels like to be their own boss. They have mental images of fancy offices and luxurious private jets. But they do not do any real work to convert their dreams into a living reality.

6. You Are an Opportunity Seeker

These entrepreneurs are always searching for new opportunities for starting businesses. They do not build castles in the air, but they instead look for opportunities to build their business. They will also keep in touch with influential people in their industry to get help, even if it comes in the form of financial help or volunteering.

7. You Are Resilient

This hardy type of entrepreneur belongs to group of strong-willed people who never give up, no matter how difficult the circumstances are. Even if finances are a problem, they never lose sight of their vision and keep progressing towards their goals. Through their determination and resilience, they manage to find solutions.

8. You Are Dependent on Others

There are entrepreneurs who are dependent on others to make their entrepreneurial dreams a reality. They are not willing to launch their businesses until they can find the right partners to work with. Therefore, they oftentimes keep delaying their ventures and sometimes end up giving up in the end.

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School’s back in session and a new season of learning has begun. But for entrepreneurs, the learning never ends. And it starts from the very beginning when you’re faced with choosing the legal structure for your business.

Selecting the right legal structure—sole proprietor, LLC (Limited Liability Company), S-Corporation, or C-Corporation—affects multiple aspects of your business. From liability protection to taxes to ongoing compliance requirements, you need to study up on the options so you’ll know enough to make the right choice.

For many small businesses, the LLC structure offers a lot of advantages. So I’m going to give you a head start on your homework and share more about it here.

What to Love About the LLC Structure

Protection of personal assets – Because the LLC is a legitimate corporate entity, it provides a degree of separation between your personal assets and those of your business. In the event of legal action against your company, your home, family car, your kids’ college funds, and other personal property will be protected. This is a big advantage over running your business as a sole proprietorship.

Easy breezy – With an LLC, you’ll have less formation paperwork and ongoing compliance requirements to haggle with than you would with an S-Corporation or C-Corporation. You don’t have to create a board of directors, create annual reports, hold annual shareholders meetings, or deal with the other formalities that come with incorporating your business. Got an aversion to complexity? Then the LLC may be the right choice for you.

Taxation flexibility – As an LLC, you may opt to have your taxes treated as though you’re an S-Corporation or have your business profits pass through to your personal federal income tax return.

With S-Corporation tax treatment, self-employment taxes (FICA and Medicare) are only applied to salaries and wages, not distributions paid to you or other LLC members. If you choose pass-through tax treatment, your business’s profits and losses get passed to your members’ personal tax returns. So if your business isn’t profitable, you’ll lower your personal income tax obligation.

Professional Cred – With “LLC” following your company name, you have some added credibility in the eyes of customers, prospects, vendors, and the business community. Not that you wouldn’t be taken seriously as a sole proprietor, but forming an LLC can help instill confidence and trust.

Potential Disadvantages of the LLC

While there aren’t many downsides to operating as an LLC, the structure isn’t right for everyone.

Possible confusion over roles and responsibilities – If your LLC has multiple members, you may clash over who should be doing what and who is authorized to make certain decisions. Unlike the S-Corporation and C-Corporation, roles aren’t specifically defined. With an Operating Agreement, however, you can avoid the shades of gray and clearly define roles and responsibilities.

Sting of self-employment tax – While pass-through tax treatment may benefit you, it could instead work against you. If you don’t select S-Corporation tax treatment, all profits will flow to your personal income tax return and get hit with the social security and Medicare taxes. Depending on your situation, that could result in more tax than if you’d be taxed as a corporation.

Challenge to grow – Unlike with S-Corporations and C-Corporations, LLCs don’t sell stock. With no shareholders as a source for generating funds, you may find it challenging to grow your business as quickly or to the degree you’d like.

As you can see, forming an LLC offers a number of upsides, but don’t ignore the downsides. Choosing the legal structure for your company will be one of the key decisions you’ll make when starting a business. I recommend learning all you can about the options before you select which one is right for you. So study up! And ask both legal and accounting professionals for guidance in the process to ensure you’ve done all the homework necessary to decide what’s best for your business.

RELATED: 6 Easy Steps to Incorporating Your Business

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By Grier Allen

Eight years ago, nine of us were working out of a cramped office attempting to create a revolutionary product for the real estate industry. Fast forward to the present, and we now have over 200 employees with 20,000+ product users.

And the secret to our growth is simple: We learned as a team to operationalize our culture. Culture wasn’t a “thing” when we started out. But when any business begins to hire aggressively and also tries to maintain the startup vibe at the same time, there needs to be a system in place.

Experiencing exponential growth will make anyone realize culture simply does not just happen. You have to put pen to paper and operationalize your company experience. Here’s how you do it:

1. Create the Anchors of Business Expansion

Begin with the team that built your company. Together, put pen to paper and decipher what culture means in your business. Zappos’ Tony Hsieh’s “mountains and valleys” exercise is an excellent place to start for this.

Our experience with this exercise resulted in the eight “core values” below:

• Create amazing experiences.
• Communicate openly and honestly.
• Do the right thing.
• Spread some laughter and have fun.
• Go for it.
• Do more with less.
• Stay humble.
• Seek and share knowledge.

Much like a great idea, it’s easy to become excited and want to open the floodgates to release your newly minted cultural tenants. But when it comes to instituting company culture, be intentional.

2. Hire With Culture in Mind

Culture starts with your company’s leadership team. When you need more people to fuel success, your leadership has to prioritize core values on an equal playing field with experience.

Consider doing so by adding culture interviews to your interview process. These interviews serve as a hangout session of sorts for the interviewee to get a feel for your company, and visa versa.

And after a new hire joins your team, don’t stop there. Amazing experiences are harder to maintain when a business is broken off into silos of people who don’t communicate. To avoid this, make sure every new addition to the team is well versed in the operations of each team and department. This can be easily done in a new hire “onboarding” process. Weave informational sessions into the process where new hires are able to meet, greet, and learn about the people and processes surrounding your business.

3. Implement Culture Into Daily Operations

The next step to operationalizing culture is working to have an organic culture. A business culture shouldn’t feel forced or awkward if it comes from the people who built and branded your particular breed of company culture.

It is much easier to overcome obstacles if everyone in the company is aware and working toward success together. But to do so, people must stay informed. Share successes, failures, obstacles, and mistakes with everyone. This can be easily done through monthly company-wide emails and quarterly all-inclusive gatherings.

Another way to keep an organic culture will come from how you conduct meetings. When differing opinions or approaches take center stage, time can easily get away from you. Instead of allowing disagreements to derail the train of progress, bring up a company core value such as “communicate openly and honestly” to get it back on track. Mentioning a core value in the middle of a meeting may sound corny, but it will instantly diffuse emotion and bring everyone back to the meeting’s focus.

4. Measure the ROI of Company Culture

How do you tabulate cultural contributions to overall ROI? Company culture cannot be bottled and sold, and it is not interpreted by every person the same way. What you can prove is how it serves as a release valve for a growing operation.

An unfortunate side effect of expansion is more pressure: the pressure to get things done, the pressure to fund your growing venture, the pressure to track and measure success. When you lessen the pressures of your growing company, team members will automatically generate more amazing experiences. In other words, culture creates quality from people wanting to create great work. If you want to measure the return on your culture investment, look no further than the time your business saves when people actually want to get work done.

In a booming industry like real estate technology, nothing is more valuable than time and talent. The ability to efficiently solve problems, reach conclusions, and move on to the next big thing is invaluable. Whether it is brainstorming an email marketing campaign, formulating a product development road map, or helping a client adapt to a new website, operationalizing culture empowers employees to go for it with gusto. When your mission aligns with the goals of everyone in the company, you get results.

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