In the last decade, SaaS (Software as a Service) has become a very popular model for new software product development. According to Blissfully’s report, overall spend per company on SaaS has increased by 50% in 2020 as compared to 2018. The largest cost component of establishing a SaaS company is product development costs. This includes the design, development, launch, and enhancement of the SaaS application. 

Often, SaaS company founders are not aware of steps, tools, and checkpoints they should follow while building their product. This can lead to overspending early on that may make it difficult to achieve profitability and help your business grow effectively.

How to optimize SaaS startup development costs

With proper awareness about the SaaS product development process, your costs can be managed better. In this blog, we are going to discuss some of the important practices to optimize product development and remove unnecessary startup expenses.

1. Create a detailed requirement document

Requirement analysis is one of the earliest and most important stages of software development. A requirement document defines the system’s purpose, functionality, interface, the scope of the product, and performance criteria. It not only helps you scope everything out but helps you to communicate your needs to your software development team. 

A sound requirement analysis and scope definition tend to improve quality planning and thereby reducing the cost and duration of a project. Improper requirement analysis can leave entrepreneurs suffering longer project schedules, higher costs, and producing poorer quality products.

Most SaaS startups want to launch with more features because of the belief that it will help them increase the adoption. However, some features cost more to build and don’t guarantee a profitable outcome. It is important to identify and eliminate all unnecessary features during the requirement analysis. It helps refine your scope to better utilize resources that efficiently build useful functionalities. 

This can be a daunting task, where you will have to involve your sales team and technical team to identify which features are most important and which aren’t necessary. The ones you identify as unimportant can be dropped from your list or rescheduled for a later development phase.

2. Follow lean product development strategy (MVP strategy)

Lean product development strategy or MVP (Minimum Viable Product) refers to creating a product with core features and offering it to a specific audience to get feedback. It is an ideal and highly recommended strategy to reduce costs and validate if there is demand for your product or service. 

If you remember the launch of the Instagram app 10 years back, they launched only for iOS, there was no Android App. The first version of the Instagram App leveraged a simple Facebook login and only included the ability for users to post pictures, like, comment, share and follow the posts. They did not have all the bells and whistles such as reels, videos, eCommerce integrations, and explore functionality. They were able to take their market valuation to $1.0 billion just with the iOS MVP. 

3. Do your design first

A major mistake many SaaS company founders make is not focusing enough time on the UI/UX of the product. The usability of your product can define your success. The UX design should be attractive, easy to use, and intuitive to navigate without affecting the performance. 

Less money spent on design can push those expenses into the development phase, potentially lengthening development time and build costs. It may also increase the churn rate of your customers, who sign up only to realize the product is not what they’re expecting. 

To save on design costs it’s important to efficiently do your wireframes and visual design first before you go into development. This helps you to see the user experience before you develop the product. If you develop with a half-baked design, you will end up spending more time and money while releasing a less-than-ideal experience.

4. Don’t hire full time, outsource your project

As a SaaS startup, you would be better off outsourcing components of your project compared to hiring full-time developers. If you hire full-time, you will have to spend a lot of money recruiting, onboarding, and managing the team. You will also have to build the infrastructure to house full-time employees. If you don’t have enough tasks assigned to them at the start, you may find yourself still paying but keeping valuable talent on the bench. 

All of this adds to your costs. For the initial few years of your product development, it is better to outsource your project. Outsourcing to a company allows you to get access to various skill sets and a range of experiences. A diversified team can bring a lot of value in terms of skills, experience, and troubleshooting. Outsourcing also reduces the cost of infrastructure (i.e. office building, furniture, computers) as the vendor will take the responsibility of setting up a management structure for the team. 

Another benefit of outsourcing is that it offers the flexibility of bringing in extra staff when it’s needed for the project and releasing them once the requirement is met. Additionally, if you find that you work well with some of these developers, you can potentially extend a hiring invite once your business is off the ground.

5. Proper communication and management

Effective communication with the development team is one of the most important components for successful, on-time, and cost-effective completion of your software product. Regular interactions with the product development team increase the scope clarity, minimizes the gaps, time delays, bugs—which in turn will keep your costs in control.

You should maintain a project management tool like Jira, Basecamp, Trello, Monday.com, or any other project management tool. Anything with all the deliverables, timeline, team members, documents available for the team. You should encourage all the team members to communicate any roadblocks or issues faced by them.

6. Use cloud backends like AWS or Azure

SaaS companies require servers and other networking infrastructure to run the applications. You can reduce your initial cost by using cloud infrastructure like AWS, Azure, Google Cloud since these platforms charge you only based upon the usage. Prior to the launch of these cloud platforms, software product companies had to invest a lot in setting up servers and maintaining them. 

With cloud servers, the setup and maintenance costs become negligible and you generally pay based upon the usage. Make sure to a trusted and popular cloud backend server for your SaaS product to avoid any disruptions.

7. Hire a freelancer for User Acceptance Testing (UAT)

User Acceptability Testing (UAT) is needed once the product is undergone unit testing, integration testing, and system testing. Inefficient UAT results in poor product quality, increases user dissatisfaction, increases marketing expenses, and potential post-launch development expenses. Many startups don’t pay enough attention to UAT. Either they are not aware of the importance or they do not want to spend proper money on testing.  

Doing a detailed UAT requires an expert tester to understand your application, create a test plan and perform the testing. You don’t want to hire a full-time tester for this role since you will need this person 40 hours a week, especially when you are in the MVP phase. 

You also should not hire the tester from the same company who is building your product either. A tester from the same company may be biased in finding defects. If possible,  hire a third-party tester. You can find experienced testers on websites like Upwork at $15-$20 per hour, who could do this job efficiently. Having an on-demand tester will keep your testing cost and application performance in check.

Software design is a process

Building software products is a process, if you follow the right process and tips, you can build better products at the right cost. Most of the time avoiding the steps or not following the expert’s advice will cost in the long run. SaaS startups should educate themselves about software product development since it is a big part of their investment and product is what drives the monetization. We hope these tips will help you to keep your product development cost in control.

As more remote teams transition to a hybrid structure, one question at the forefront of many business leaders’ minds is how to maintain high productivity levels both at home and in the office. 55 percent of employees with flexible work options are high performers, compared to just 36 percent of onsite nine-to-five employees, according to a Gartner report. But hybrid workers can still face barriers to concentration that derail their productivity.    

Some of these distractions include emails or text messages, unscheduled phone calls or video chats, news headlines, social media notifications, and caregiver or household responsibilities. In fact, the Gartner research continues, hybrid workers are 2.54 times more prone to encounter digital distractions than onsite employees. As a team leader or business owner, it’s your job to reinforce a culture of productivity with some help from the strategies below.       

1. Improve time management

Effective time management skills boost self-efficacy, conscientiousness, stress reduction, and well-being, all of which elevate job performance, a study in the PLOS One Journal points out. However, some employees need help learning to structure and manage their time — especially at home when they’re not as accountable to direct supervision. To help them overcome these challenges, it’s important to train your team members in these remote time management best practices from 4PSA:  

• Stick to a routine, whether working at home or in the office.
• Schedule high-priority tasks around optimal energy levels. 
• Carve out time for short, periodic breaks in the workday. 
• Identify SMART goals that not only specify what they’ll achieve but also when they’ll achieve it.
• Declutter the workspace to save time and boost efficiency.
• Create boundaries or screen limits to avoid digital distractions. 

2. Use the right tech solutions

A joint survey from the business solution platforms Wrike and Pulse found that 58 percent of leaders want a technology stack that optimizes team collaboration, project management, and internal communication. Asynchronous collaborative work management (CWM) software — for example, Asana or Microsoft Planner — is the answer. It allows teams to keep all communication, including project files, assigned tasks, and status updates—in one centralized online platform. 

Projects are easy to adjust and teams stay notified of all changes without the need for meetings or emails. This means hybrid team members can stay connected no matter where they’re located. No need to orient their schedules around virtual meetings at specific times. And by taking the immediate urgency out of communication, which often causes mental overload, this flexible solution reduces Zoom fatigue and increases productivity.

3. Clarify goals and expectations

In a hybrid environment, you can’t measure the contributions of team members using traditional baseline metrics such as hours in the office. Instead, it’s important to set clear expectations of what their job deliverables are. “Close to half of U.S. employees start their day with an unclear definition of what they’re expected to achieve,” data from Gallup indicates. Gallup advises clarifying expectations around these three key performance domains.

One’s work

What goals will the employee need to set and meet in terms of their individual tasks?    

One’s team

What projects will the employee need to partner with other team members on?

One’s customer

How will the employee translate their work into the larger scope of customer needs?

4. Maintain work-life balance

While 70 percent of employees want the flexible option of a hybrid model, one in five thinks their manager doesn’t care about work-life balance. On top of that, 93 percent feel overworked or exhausted on the job, a Microsoft survey indicates.

If this trend continues, it can lead to burnout which lowers energy, motivation, sense of purpose, and overall quality of performance. Therefore, it’s vital to set an example for your team in the area of work-life balance. Communicate when you are not available and consistently unplug after a certain time each day. Resist the urge to send or answer emails after hours, and allow employees to create their own boundaries.   

5. Set limits on virtual meetings

According to the same Microsoft research cited above, the amount of time spent in virtual meetings has doubled in the past year. The length of each meeting has also increased from 35 to 45 minutes. Moreover, 62 percent of these meetings are unscheduled. Which interrupts the workflow of employees who are required to join. 

Another study in 2019 found that workplace interruptions elevate stress, weaken attention spans, and result in errors. In some cases, virtual meetings are necessary. But, when you spring them on employees or exceed the time allotted, you can worsen the digital overload that hybrid workers often experience already.    

More than likely, you and your team added additional meetings when going remote. Now is the time to determine what meetings are vital to maintaining performance. If you can, it may even be valuable to set aside a specific day of the week as a ‘no meeting’ day to help employees carve out dedicated work time. However you decide to streamline your virtual meetings, just be sure you’re vetting what’s important and what’s a distraction for you and your team.

6. Focus on building team spirit

Adaptable employees who can sustain relationships with coworkers both in-person and on a virtual platform tend to thrive on a hybrid team. But those who aren’t as skilled in forming connections can find the remote-onsite stratification hard to navigate. For these employees, a lack of cohesion leads to feeling “out of sync with colleagues and managers,” which hinders their ability to collaborate, reports Harvard Business Review. 

Poor collaboration can also harm productivity, so reinforce a culture of team spirit with these initiatives.

Regular employee feedback

Set aside time each week for employees to pitch ideas for workflow or organizational improvements, then vote as a team on which idea is the winner.  

Team activities

Organize a team lunch or coffee break, either in person or via video conference. Based on the number of employees who join in, you can also coordinate smaller breakout sessions to facilitate more personal, in-depth connections.

Promote personal wellness

Coordinate virtual exercise classes or fitness challenges to promote friendly competition between coworkers and invest in their well-being at the same time.

Community activism

Raise funds for a charitable mission together, as this can help align everyone around a common goal and boost team morale through community activism.

Employee voice

Give employees ownership over their team bonding rituals. When the group has a voice in choosing these activities, they can be more excited to participate.    

Lead your hybrid team to maximum productivity

Hybrid work is the future of business for organizations all over the world. However, this model is only as effective and successful as the performance of hybrid workers. By focusing on these strategies not only will you maximize your team’s output but you’ll also ensure they stay engaged and happy despite the challenges of the new hybrid environment.

As your business grows, you might find yourself being able to hire outside agencies to help you soar to new heights. These can be copywriting, search engine optimization, advertising, design, and other services. 

Hiring an agency to work with can be exciting but also expensive, and results can vary if you find the wrong partner or won’t analyze what you’re doing together.

We’ve worked with four agencies (SEO, paid acquisition, conversion copywriting, design) and made some costly mistakes. Mistakes worth $120,000. To save your business from similar pitfalls, we will share the lessons we learned. 

Top 4 mistakes to avoid when partnering up with agencies 

Here are the four most common expensive mistakes business owners make with agencies. Don’t let them stress you out and slow down the growth of your business.

1. Not understanding onboarding costs

As a rule, it takes from two to four weeks to onboard a full-time employee, and it takes even longer for them to start producing at their maximum capacity. Just like your new employees, agencies need to be completely prepared and settled in due to effective onboarding. 

The copywriting agency we hired has spent as much as 60 hours for the research, discovery calls, and customer interviews. We were frustrated about this at the beginning, as this time cost us $12.5K, and we haven’t seen results yet. We didn’t understand that this effort was crucial for the high-level copy for our landing pages.

Another good example is our work with a design agency. Before we hired them, we spent four months developing a detailed description of our target audience and brand persona. Every minute of our work paid off in the end result, the ease of collaboration, and the speed of delivered work.

But there was a completely different story with the SEO agency. They started from one discovery call and keyword research. Although we already knew what was working,  the agency convinced us to go another route. Consequently, we’ve lost 1 year of potential growth, $25k of agency fees, and ended up with minor traffic to the generic article with $0 in revenue.

What we learned

When hiring an agency, it is crucial to make sure they have enough insight before starting a project. Also, be prepared to spend money on proper onboarding.

2. Not taking into account the importance of the iterations’ speed 

Any marketing activity requires continuous improvement, feedback checks, and keeping track of events. For example, when you work on an email campaign, you create a series and send out the first batch. After a while, you analyze the results, improve, and repeat.

Here is what happened with the copywriting agency. They have developed a sequence of cold emails, but they didn’t work. So we analyzed everything and sent feedback to the project manager, who passed it to the copywriter, who scheduled a call to get more insights. That was taking too long.

The story repeated itself with a paid acquisition consultant. When we reported that we were unhappy with the result, it took him a week to make changes to the campaign. As a result, we were unable to create an intensive feedback loop. The mistake cost us over $14K. 

What we learned

It’s better to outsource only those projects where success doesn’t rely on the speed of iteration.

3. Not investing sufficient time to make agency’s work easier

Hypothesis: if you hire an agency, they will do all the hard work for you. You can sit and relax. Wrong!

From your side, you need to do the following things:

• Provide explicit specifications on what you expect to be done.
• Constantly monitor if the agency has no blockers that bother them to work on the project efficiently.
• Always test their work.
• Give timely feedback.

If you aren’t investing enough time and effort in these processes, there is a high chance of the project not getting to the place you want it to.

What we learned

When you hire an agency, it is essential to find the time to be available for their needs as much as you are available for your internal team and clients.

4. Not letting the team handle certain tasks in-house

As your workload begins to increase, looking for help outside the company can free up valuable time and resources. However, not every task can and should be done by agencies. Be careful considering which work you want to pass off to external contractors. 

These are the tasks we won’t outsource again and will rather keep them in-house:

• Cold email copy. Failed because of the slow feedback loop.
• Product Hunt launch. Because Product Hunt is a community-driven platform, you have to spend a lot of time giving value and personal touch to the audience. Not a single agency will be so good and fast as you and your team.
• Technical or niche-specific articles. In our case, the SEO agency wasn’t the right option. Yes, they did all the keyword research and knew the proper structure for better rankings. But our content didn’t convert as it had no real value. 

What we learned

Outsourcing can make things easier for a business, but not everything is good for outsourcing. It makes sense to handle some areas in-house (e.g., your core competencies, tasks that require timely iteration).

Carefully consider what and how your outsourcing

As your company starts to grow, you might want to outsource some part of your work. Of course, partnering up with agencies or paid consultants to take over certain areas of your business can indeed be less expensive and quicker than training your staff or employing new people.

But as discussed in this article, it makes sense to handle some tasks in-house. For example, we decided to take care of technical or niche-specific articles and cold email copy ourselves. We also understood that we couldn’t avoid onboarding costs when hiring agencies. Otherwise, efficient work isn’t possible. 

And finally, we want to emphasize that hiring agencies doesn’t mean you can relax and watch from the sidelines. Be prepared for testing and analyzing their work. Provide constant and timely feedback and ensure there are no blockers that hinder them from performing at their full capacity.

According to the Bureau of Labor Statistics, 3.3 hospitality workers out of 100 experienced workplace injury in 2019. With 13 million people working in the industry throughout the US, taking preventative measures to prevent serious injury or harm must be a priority. In fact, implementing effective workplace safety is a growing issue across the industry. Now, owners and managers are placing greater emphasis on protecting their workers.

In part, the ongoing coronavirus pandemic has highlighted the need for more robust workplace safety plans than perhaps ever before. Introducing a myriad of new measures to help workers adapt to the “new normal.” The bottom line is that hospitality has had to adapt more than other industries to the current climate. As such, workplace safety has become a critical component in ensuring that businesses can continue to operate.

However, in order to understand how to effectively implement workplace safety practices in the hospitality industry, we must first understand a few things. The common situations in which workplace injuries occur, how hazards present themselves, and how these situations can be exacerbated when coupled with certain risk factors. Here, we explore a range of industry concerns, common risk factors that must be considered, and how you can build safer working environments within your venue.

Common safety concerns to be aware of

Although the risk of workplace injury is often unpredictable, some hazards in hospitality occur more frequently than others. The following three causes are the most common reasons for injury in the workplace and are apparent in every hospitality setting. These concerns need to be identified and managed in order to reduce the risk of injury for everyone present and ensuring your existing protocols cover each of these concerns is the ideal place to begin when addressing workplace safety.

1. Incorrect manual handling 

It is highly likely that employees in the hospitality industry will, at some point, be required to handle heavy items such as furniture, luggage, bulky deliveries, and more. In order to minimize the risk of injury, all staff must be trained in the correct way to manually handle heavy or awkwardly shaped items. Additionally, those with pre-existing injuries or conditions should not be expected to undertake these types of tasks, and employers should be aware of those individuals before assigning these jobs.

2. Slips, trips, and falls

Perhaps unsurprisingly, slips, trips, and falls account for the majority of injuries in the hospitality industry, especially among chefs and waiting staff. Walkway hazards, food spillages, and wet floors must be managed to reduce these kinds of accidents. Appropriate footwear, good housekeeping, and good lighting are practical measures that can be taken to reduce the risk of accidents from slips, trips, and falls. Additionally, regular reviews of potential hazards within working environments are crucial to minimizing the risk of injuries caused.

3. Occupational violence 

The societal nature of the hospitality industry means that staff are always at risk of occupational violence, particularly in bars, restaurants, hotels, and any other businesses operating at night. Measures can be taken to reduce the risk of occupational violence in the workplace, however, unfortunately, there is no single measure that can prevent unpredictable violence from happening in the workplace. The best way to combat unpredictable occupational violence is to ensure employees can call for help as soon as a situation begins to escalate beyond their control. Additionally, ensuring staff are trained in incident control is highly important.

Risk factors

Certain risk factors can come into play and further exacerbate incidents and lead to greater chances of injury for employees and guests alike. When common concerns are coupled with these risk factors, dangerous combinations occur, leading to the greatest possibility of injury for any party involved in the hazard.

Risk factors include:

• Inexperienced and young employees
• Employees overextending themselves with tasks
• Long working hours and split shifts
• Staff with multiple jobs

Inexperienced workers and lack of supervision are two of the most common risk factors which result in injury, especially when coupled with an already hazardous situation. Some employees will also inevitably feel the need to impress the boss, their supervisor, or even co-workers, often to the point of attempting dangerous and physically demanding tasks which are beyond their own capabilities. This type of behavior should be identified and eliminated, particularly with younger employees.

Long working days are also a significant risk factor as people naturally tend to lose focus towards the end of a long, tiring shift. This loss of focus or concentration can be dangerous, and even fatal when coupled with common workplace hazards. It is an employer’s responsibility to ensure workers are not exhausted when beginning a shift, as particularly within hospitality, staff may have multiple jobs.

How to create a safe working environment for everybody

The goal of the employer should be to minimize the risk of injury in the workplace for all employees and guests. There are different measures and procedures which can be put in place to ensure a safe working environment for everybody in the venue. This means that employees should not pose a risk to themselves or other employees, and it is your job to ensure that this is the case by promoting safer working environments through awareness and individual responsibility.

Start with the hiring process

Workplace safety ultimately begins within the employee selection process. Many employers can benefit from incorporating safety-oriented questions into their interviewing and hiring process. Candidates who exhibit safety awareness should be selected over those who do not. This allows you to create a safety-oriented culture in your business from the ground up with employees who share these beliefs and concerns. Those without the requisite knowledge of simple safety and security measures may also be hired but will likely require more comprehensive training.

Training your employees

Training for employees is critical. Whether it’s their first job or they have decades of experience, all employees should be guided through the same thorough safety training. Every employee in the business should be trained in health and safety procedures and routinely informed of the latest safety practices and techniques—maintenance doesn’t just apply to machines, and ensuring staff are regularly updated on protocols is an ongoing process that should always strive for improvement.

Add security measures

Security personnel should also be prioritized within your establishment, and every employee should be aware of their presence. This also means that employees should also be aware of when to report suspicious activity to security and how to do this in a diplomatic and tactful way. Additionally, ensuring security is readily available and approachable is highly important.

Wearable panic buttons

For unpredictable situations, one practical measure that employers in the hospitality industry can implement to ensure staff and security can work together effectively and efficiently is to implement the use of wearable panic buttons. Many states have even mandated the use of these devices, making it law for employers to provide employees with them during working hours for safety and protection.

Panic buttons can make a huge difference to safety and security for employees and guests alike, providing a fast reaction to anyone who is injured and ensuring immediate medical care, bringing attention to escalating situations before they become serious, and generally ensuring safety and providing peace of mind for anyone within the venue. Additionally, they are useful devices in combating crime or antisocial behavior, allowing staff to flag issues discreetly and without having to deal with these types of problems alone.

Policies and credentials

In addition to responding to panic button calls, your security staff may also play a pivotal role in ensuring guests adhere to policies put in place to protect everybody’s wellbeing during the current pandemic. This means reminding guests to wear masks and disinfect their hands in a friendly but firm manner, as well as ensuring social distancing is maintained within your building.

Furthermore, security can check the credentials of each visitor that comes to your venue for work, for example, builders or temporary catering staff. As part of this system and to avoid the possibility of anybody simply wandering into your venue without having to show visitor credentials, side and back doors should always be locked after being opened, and a logical flowthrough of guests should be maintained in common areas.

Protocols and planning

Finally, health and safety is the responsibility of everybody, and all staff should be able to identify hazards and deal with them instantly. Alongside robust and comprehensive protocols, members of staff must be informed of the evacuation plan and this information must be presented visibly around your venue for guests to view. Having an effective evacuation plan with informed staff could be the difference between life and death should a tragedy such as a fire occur.

Review, revise and update

Instilling a culture of health and safety in any organization takes time and effort, but despite your best efforts, accidents can always occur. Unpredictable situations, violence or imminent, threatening behavior from guests cannot always be avoided and in these cases, employees are in danger of physical or emotional harm. However, by regularly reviewing and updating protocols, you can significantly minimize risks to both guests and staff, helping to build a safer environment for all stakeholders.

Making sure your company is running like a well-oiled machine isn’t always easy. Many small business owners bank on their experience. The word alone transmits a sense of trustworthiness and reliability that makes customers feel secure. 

However, if you asked most entrepreneurs to define exactly what that experience is, they might be hard-pressed to provide a clear answer. 

It’s a concept that is both powerful and vague—both relied upon, and not understood. So, what is real experience? What really makes a person or team valuable to a company? How is that experience born out of business dealings, and how can a company retain that experience if they can’t even describe it? 

Performance management expert Maik Wagner spends his days answering these questions. 

He works with companies to help them turn experience into a usable, transferable resource. Through a process known as knowledge management, Wagner ensures that valuable experience is not lost as the company develops, and helps less effective teams learn from high performers. 

How to turn experience into a viable resource for your business

Because experience is often diffuse, highly individual, and context-dependent, it can be hard for business owners to see the wood for the trees—especially in the very early days of a growing company. Therefore, a wealth of in-house experience often goes untapped. Without a proper system to define and harness this knowledge, companies simply lose it instead of using it to reach their business goals. 

Here, Maik Wagner shares a few tips on how a company can weigh its experience, turn it into a usable resource, and maintain it within the organization. 

Assess effectiveness 

Not all of the experience that a person or a team believes is important will be useful to a company. Therefore, before you start a process of knowledge management, it is important to know the exact kind of experience that you want to gather. 

Ultimately, you need to decide what will end up being economically useful to your company. What kind of knowledge will help your teams perform better and provide a better return? It will be easier to define what useful information looks like once you have established strict parameters.

Decide what you need to know 

Most experience within companies is accrued over long periods of time when people and teams work together and build their knowledge. However, while that knowledge is trapped in the context of an individual or a team, you can’t define how it could benefit your business. 

Therefore, you need to remove the context from the experience to decide what is really an economically useful resource. Start by asking yourself where performance can be improved, and what knowledge sets should be considered general information? 

Using these answers as a guideline, you can analyze and process internal experience to distill the most useful, broadly applicable information. 

Explore networks 

Make sure not to fall into the trap of believing that only you or your best and brightest employee has useful experience. High performers work in tandem with other people and teams that all feed into knowledge processes and how experience is developed. 

To explore networks, and thus the entire span of knowledge within an organization, you need to speak with the key stakeholders that you interact with on a day-to-day basis. This will give you a broader picture of how experience is developed and processed and has the added advantage of going beyond just a hunch about who/what is most valuable. 

Be realistic 

To implement a proper knowledge management system, it is important to speak to experienced individuals, examine complex communication patterns, and assess the validity of experience types against a series of theses and hypotheses. And It often makes sense to bring in a knowledge management expert to help you through this assessment. 

But, even armed with very detailed knowledge about management and team behaviors, it’s impossible to discover everything that makes up a perfect experience set. 

You should, however, be able to define a set of derivatives that can be used to quickly train successors, redevelop company processes, and strengthen competencies within teams. 

Manage effectively 

By extracting knowledge from experience, business owners are given a very good foundation for further developing teams and optimizing processes. However, now that the knowledge has been distilled, it needs a good management structure. 

You should decide how teams will use the findings, how they should be applied across the organization, and perhaps even most importantly, what should be discarded, or kept for use at a later date (e.g. when you have a larger team). 

Start small 

Applying what you’ve learned is a challenging task and it’s important to start small when you begin to implement these learnings. If you overhaul every process based on your findings, you won’t be able to properly assess the success of your efforts. And if you try to change the overall corporate culture, you could distort the impact of any smaller changes you’ve made to your knowledge management process. 

Measure success 

As with any process that isn’t directly monetized, it can be very hard to measure knowledge management success. However, if an employee can start their new role armed with the knowledge, processes, network, and best practices of their predecessor, it will quickly become apparent that your efforts paid off. 

 “Assessing the success of changed processes, or whether a team is developing certain competencies can take a long time. Therefore, it’s important to remember that knowledge management is a long-term commitment that requires ongoing attention and not just a one-off quick fix,” says Joanna Weiss, a manager at, COMATCH, a young start-up that successfully implemented its knowledge management process in 2018. 

Knowledge management keeps your business on track

Effective knowledge management helps companies operate at peak conditions and means that the inevitable loss of valuable employees won’t hamper how effectively you run your company. It also means that struggling teams can learn from their stronger counterparts, with the end result being a high-performance culture.

And  If your company is still struggling to keep up the pace, maybe you should ask yourself if your in-house experience is as reliable as you think it is?

You’ve come up with an innovative idea that has the potential to transform your industry. Maybe you have already landed VC funding or other types of investment and you have some runway. But then again, you could still be building out the fundamentals of your business and aren’t at that point yet. Either way, you will need a budget-friendly office that accommodates your team size while still helping to drive the business forward. 

Why your business doesn’t need a traditional office

As you start to plan out your business and its needs, the first thing that often comes to an entrepreneur’s mind is a physical location to ground a company. But in a world where a large cross-section of employees have adapted to a digitalized infrastructure, a traditional office is no longer a necessity. 

Originally, an office building or space was a signal of how well your business was performing or was expected to perform. But with revolutionary companies like Dropbox, Shopify, and Upwork forgoing their office building for permeant, flexible remote work environment, those days are quickly coming to an end. 

SaaS, tech, and other startups are built on revolutionary ideas and have been known for even changing the function of a workplace. If you don’t need a space to entertain customers or investors, and collaboration can still thrive through digital channels, a virtual work environment might be just what you are looking for. But there is still value to be gained from a physical office space. If your employee count is growing fast and you need a place to ground your collaboration or host clients and investors, a physical workspace could still be beneficial. 

5 alternatives for your startup headquarters

However, the high cost of rent and utilities of a traditional office is no longer a necessity for those to make an impact on their customers and build their business. Instead, this money can be spent on driving actual ROI. 

Here we’ll explore five budget-friendly alternatives to mainstream commercial buildings and office space.  

1. Create a virtual working environment

Instead of renting an office space, you could just work from home. This removes the need for security, rent, and commuting expenses. Since COVID-19, the majority of the people in the U.S. have grown accustomed to working from home. Many companies have established great virtual infrastructures that still allow for vibrant company culture. Research what these companies have done well and use it as a baseline for your own. 

Additionally, virtual work opens up your candidate pool while allowing employees not to be tied to one location and instead enjoy the digital nomad lifestyle or work from anywhere. 

Pros

• Removes the cost of rent and utilities
• Gives you a wider pool of candidates 
• Allows employees to live and travel anywhere
• Offers flexibility many employees are looking for 
• Removes commuting time that can be dedicated to actual work

Cons

• No physical location for employees to gather and collaborate 
• A remote infrastructure must be established to keep employees engaged
• Productivity must constantly be monitored and audited
• Burnout can be higher

2. Share an office with other startups 

It’s possible to get access to shared office space for a fraction of the cost of a commercial office. Many people work out of shared spaces while they’re securing early funding, or if they just need a place to stay while their startup is taking off. Some startups don’t grow as fast as they project. 

This means they might have extra space that isn’t being properly utilized. Call around to startups and see if you can negotiate using unoccupied space for a small fee. Remember, they are not only helping you out, you are helping them out too, so don’t be afraid to negotiate. 

Pros

• Reduced cost of rent and utilities
• Allows startups to support each other in areas 
• Gives you a collaboration space for your employees to work together
• You have the chance to learn from other startups

Cons

• Space might be on the smaller side 
• You have to put up with the other company’s culture, events, and schedule
• Renting the space could be conditional until the other startup increases its growth

3. Find a local co-working space

Because many startups and small businesses have tight budgets, using a co-working facility is a viable alternative for meeting, working, and collaborating with other like-minded people. These types of spaces often offer the best value on rent because it doesn’t require an entire office suite. 

A typical co-working location will offer amenities that allow members access to Wi-Fi, conference rooms, and printing services, as well as allowing employees to reserve desks and tablespaces. Membership costs range from $50 to over $300 per month depending on the facility and membership type.

Pros

• Rent is often monthly without a contract
• Allows freelancers and startups to pool resources to support different areas of the business
• Give you a collaboration space for your employees to work together
• You can choose to leave at any time if you are monthly
• You often have access to a kitchen, snacks, and employee engagement activities
• You don’t pay for utilities

Cons

• Space could get noisy 
• Privacy is often minimal
• If you are monthly without a long-term contract you could lose your space
• You can’t personalize the space to your company

4. Rent a house 

The founder of Apple, Steve Jobs, started the company working out of his garage. Startups have been known to start in the attics and basements of homes. A house is a great place to start out—especially if you have space. You can find homes that are in areas with cheaper rent and tax rates. Sometimes renting a floor of a house can decrease overhead when compared against the cost of commercial space. Alternatively, you could also rent a small apartment for a few months and use that to ramp up to a full-fledged office space. 

Pros

• Rent is less than a commercial office 
• It gives you time to scale your business
• There are a lot of cool areas to find less expensive apartments

Cons

• You still must pay for utilities 
• You need to make sure it is legal to run a business out of the house or apartment
• If you are growing it could be tight quarters and some employees might need to be remote

5. Check with large companies 

Large corporate headquarter are built to include room to grow. They also can have an abundance of open conference rooms and open communal spaces that help drive collaboration. See if you can rent a conference room or a few desks from them. Unlike co-working spaces, they aren’t looking to get revenue from renting their space. 

This also means that you would have access to Wi-Fi and electricity, likely, without any additional charge. Although, depending on the security precautions of the company, you and your coworkers might only have access to guest Wi-Fi and a restricted area of the building. 

Pros

• Rent is less and could even be free in some cases 
• You don’t pay utilities
• You get the feeling and look of a large business
• Gives you a collaboration space for your employees to work together

Cons

• Space might be limited to a conference room or a group of desks
• Movement around a corporation could be restricted
• Access to the internet could be restricted to guest access only
• If the company needs the space back, you could be evicted

Bottom line — Be creative when considering your office space

Creativity and innovation need to be at the heart of every startup. This mentality should extend to your office space. Your office space should be a representation of your business – agile, creative, and innovative. This might mean your company is fully remote and taking advantage of the increased candidate pool and the kind of freedom that gets the creative ideas flowing. 

It could be that you’re working alongside other innovative companies trying to make a difference. Whatever direction you go, make sure it makes sense for your bottom line and employees.

According to the Association for Information and Image Management International, document management is:

“The use of a computer system and software to store, manage and track electronic documents and electronic images of paper-based information captured through the use of a document scanner.”

In short, document management is a digital method of scanning, storing, and tracking all necessary business documentation. This includes things like your business plan, your profit and loss statements, tax documents, onboarding documentation, brand guidelines, and anything else that is necessary to operate your business. Even simple things like meeting notes and emails could fall under this procedure.

Why is document management important for small businesses?

Successful document management has a large range of benefits for businesses, both large and small. Having a smooth documentation process can alleviate bottlenecks in productivity, keep your entire team informed, and make it far easier to track down important pieces of information.

Now, being able to track and organize your internal documents may come as an afterthought, compared to the immediate needs of day-to-day management. Taking the time to get this sort of process in order can seem time-intensive and unnecessary. However, if implemented correctly, it can save you and your business countless hours and dollars that you would otherwise spend on unproductive tasks.  

Let’s take a closer look at how effective document management is crucial for business success.

1. Improve time allocation 

The amount of time spent on sourcing files can be hours upon hours every week if files aren’t managed correctly. 

This issue can be even more difficult to alleviate if you have a remote work or hybrid business model. Struggling to find information can’t simply be remedied by asking your colleague who is sitting next to you. Instead, there may be messages sent across multiple platforms and hours spent waiting to hear back on the simple location of a document. 

This wasted time could be better utilized for tasks that actually contribute to the business. And by adopting some sort of document management solution, you can help your team easily avoid this pitfall. 

2. Ability to index content

Document management systems provide the option to index content. This means that you can label and code documents in a manner that is best suitable for your employees and industry. There is no set system so you can alter it as you wish and adapt as needed.

For example, if an employee is searching for information, there is no set word they need to enter. They can search by the title, description or simply words that they either remember are in the document or would most likely be in the document, for more fluid access. 

So, while you’re documentation will be more organized, there is no fear that this creates a strict process for searching. Your employees can stick to whichever method works best for their workflow and still find every document just as easy as the next.

3. Ability to run reports

Compiling information and generating reports is another timely task that can completely be streamlined with document management. This is typically automated within the system, taking another task off your employees’ plates, as well as removing the need to invest in another tool.

Similar to additional elements of document management systems, you can customize the reports to suit your business needs. Whether you need inventory reports, account activities, or other operational reports, these are all doable. 

Bear in mind, before you purchase a document management system, you’ll need to double-check its features, as not all systems are created equal. Just like any product or service, there are benefits and drawbacks, making each platform unique in its own way, and suitable to different businesses.

4. Additional security 

Data breaches have become more and more common and are something that all businesses should be aware of and protect themselves against. These data breaches can expose business documents, employee and customer information, and overall be detrimental to the survival of the entire business.

A crucial benefit of document management systems is that their storage systems are secure and can be trusted. This is arguably one of the most important reasons to store your documentation in this way. 

The entire business of these systems is to file documents, meaning they have a larger incentive to focus on security and keep documents secure from hackers. They often have better controls, and more money to invest in these security measures than your typical small business, which has other priorities. 

5. Assists with confidentiality

This is similar to security except it focuses more internally by ensuring not every team member has access to every single document, such as contracts, proposals, and additional confidential information. Document management systems can automatically organize who has access to what file by utilizing technology, and alternatively, you can manually give access and prevent access to specific files.

For instance, Google Drives allows you to change the settings so that people have different levels of access to shared drives, determined by their roles. From the highest level of access — the Manager, right down to the role with the lowest level of access — the Viewer.

For individual documents, you can choose whether anyone who has the link to the Google Doc can access the document. Or alternatively, you can choose who has access by individually inviting people to access the document. 

Accidentally giving employees or clients access to the wrong files can instantly cause negative situations, inevitably eventually leading to loss of clients or employees. 

6. Ability to reduce and retract file redundancy 

File redundancy is essentially the same information stored in multiple places, resulting in either accidentally accessing old versions of files, or deleting the wrong files. This can cause loss of important data, forwarding the wrong information, and having to repeat work, as well as the loss of time undertaken to rectify these mistakes. 

However, bear in mind, data redundancy can be intentional and there is no need to worry about this form — intentional data redundancy is often utilized for data backup as well as security, allowing access to certain file versions. 

Document management systems organize files where redundant data can be reduced if you wish, so the data that is stored is useful. Depending on the system you opt for, you may be able to implement time stamping, a notification system about updated versions, or other techniques. All techniques have the same result of minimizing repeated data. Therefore, there is no clutter you need to sift through or get confused about. 

7. Offline availability

While Google Docs can be a starting point for document management, its biggest drawback is the inability to access files when the internet connection is faulty or you are needing to work from a different location where it’s just not possible to get WIFI.

A number of other platforms still give you access to files even when there is no internet connection. I know this is helpful when my office internet sometimes disconnects. I am still able to meet deadlines and work, despite the issues. Or, for instance, an employee is meeting a client but arrived early or the client is late. The employee is still able to carry on with tasks and time isn’t wasted. When you do reconnect to the internet, the changes automatically sync.

Investing in document management for business growth

With strategic time management and optimizing all work hours, the time saved having to sort through files can be allocated to doing business that directly brings in profit. Smooth dissemination of files by easily accessing and sharing files, regardless of location assists all business processes, bringing more money into the business.

The amount of money you do earn from utilizing these systems is dependent on the number of employees in your business, the industry you are in, and the length of time you already spend sourcing info. The rule of thumb is the more time saved with these additions, the more money your business will bring in.

While it will cost you upfront to purchase the file management software, overall profits will likely increase in the long run. So, before investing in document management software, be sure to run a cost-benefit analysis and look closely at your budget. More than likely you can find an appropriate solution within your price range, or identify a revenue target where you’ll be able to purchase the surface.

Urgent: demanding immediate attention or action. When shoppers are browsing your online store, they’re often acting with an unfortunate lack of urgency. With multiple tabs open, comparing reviews, prices, and delivery options, customers like to behave like they have all the time in the world. What this means for your online store is a race to the bottom for grabbing customer’s attention with low prices — it erodes your profit margin, as well as devaluing your products.

On the other hand, if you instill a fierce sense of urgency in your users, you’ll separate yourself from this price-slashing competition. Urgency can become a powerful motivator in your store if you get it right. We’ll take a look at some effective ways for leveraging this psychological strategy, but first, let’s see exactly why urgency is so important for eCommerce.

Why urgency drives conversions

In her paper The Psychological Effect of Perceived Scarcity, researcher Shipra Gupta developed an extensive theory about how creating a sense of scarcity changes the psychological environment in which shoppers operate. By fostering this idea of scarcity, shoppers acted more impulsively and make decisions based on less information. 

Importantly, Gupta reveals that even a carefully curated yet artificial sense of scarcity can have powerful results on consumer psychology. Creating urgency in your shopper’s minds entails this suggestion of scarcity.

Often, digital shopping gives consumers feelings of power — with so many options to choose from and resources to assist comparison, consumers are empowered to make well-considered choices. By reminding your customers that the products, deals, and delivery options they’re seeking are scarce, this psychological state of urgency is induced. This means you’ll have more people clicking buy in your store.

eCommerce mistakes that are costing you money

Even if you are a professional, making mistakes while creating urgency in your online store is very common and can be a challenging task. 

With the availability of online shopping, the clients are exceptionally cautious about where they are going to spend their money, and making a simple mistake can hand a client to your competitors.

Below you can discover the 3 of the simple mistakes that are costing you money:

Lack of strategy 

Running giveaways or promotions onsite can be an effective marketing tool but many professionals make the mistake of not creating a follow-up for that and the result ends up being forgotten. Make sure your giveaway or discount is used in a strategic way — remember, if you’re doing a giveaway, you want to create a social promotion. Otherwise, you’re just giving away free or heavily discounted products, which is great for the client but not for you.

Ignoring the competition

eCommerce is amazingly straightforward which means that the client can easily browse to check for prices, promotions, and the best deals for them. Analyze your competitors, check what prices they have and which bargains are pulling the clients away.

Not adding any value

It can be annoying for the client when seeing a company talking only about themselves. Make it about the client, know your demographics and psychographics, show the benefits that can bring to them, why they can not miss out. 

7 tips for creating urgency on your online store

So, you know that creating a sense of urgency is more likely to drive sales. How exactly do you do that on your eCommerce site or online store? Here are seven methods worth looking into.

1. The language of urgency

There are many ways you can create urgency in your store through deals and deadlines. To build an online store that really instills this feeling into your shoppers, you need to integrate the language of urgency into your copy. Urgency is driven by the emotion of your shoppers, and the copy creates this broader feeling, a fundamental platform for your short-term urgency-inspiring strategies.

Keywords and phrases such as “last chance,” “hurry” and “don’t miss out” are the vital language of urgency. Additionally, peppering exclamation points throughout your copy will turn the tone towards a high-tempo urgency.

2. Leveraging the holidays

Deadlines are powerful motivators for your shoppers, so you should be creating them artificially wherever you can. Sometimes, however, deadlines exist for a reason — and when holidays such as Christmas and Valentine’s Day come around, urgency goes global. eCommerce sales spike between Black Friday and Christmas, so make sure you’re primed to leverage these holidays in your store. Running specialized sales for popular items can boost demand, and a ticking clock counting down the hours to the big day will remind your shoppers that time is slipping away.

These holidays also offer an opportunity to integrate delivery deadlines into your urgency strategy. With the added strain on postal networks, make it clear to your users that the window is closing. For example, a banner could indicate they have X hours to purchase to ensure guaranteed delivery before the 23rd of December.

3. Remind viewers they aren’t alone

Scarcity can be induced in a variety of ways, for example by suggesting that product stock is limited. However, scarcity isn’t exclusively a function of quantity — it’s about the supply of a product relative to demand. Reminding your shoppers that they’re not the only ones out there induces a sense of competition that’s highly relevant to urgency, prompting immediate purchases rather than risking missing out. 

Car hire companies have been leveraging this strategy to great success, displaying information about other browsing users. For example, you could say “15 others are browsing this product right now.” A dynamic view counter that rises as customers browse is a strong motivator.

4. Show dwindling stock

Showing stock numbers brings home the immediate fact that there is a limited supply of the goods customers desire and this strategy can create store-wide urgency for even casual browsers. To have the greatest impact, target specific products with a tag that suggests stock numbers are low. Using specific stock numbers gives this strategy greater integrity in the viewer’s eyes, so suggest to your store users that a product is down to the last five or even one.

5. Using delivery options to instill urgency

When shopping online, there’s an inevitable delay between purchasing a product and receiving it. For many shoppers, delivery time is vital to their interest in a product as shopping is about instant gratification and those days of waiting are an unwelcome delay. Logistical networks are now enabling next-day and even same-day delivery, and these appealing options often encourage shoppers to buy quickly. Leveraging this impulse by reminding customers of the closing window with which they can access these delivery options creates a powerful sense of urgency.

Another way of introducing urgency in your delivery options is by making delivery itself a scarce commodity. Offer free delivery for either a time-limited window or for the next few buyers. If the next three purchasers receive free delivery, everybody will want to snatch up the offer.

6. A day for charity

Sometimes urgency can be created by giving back. Combine your community spirit with this powerful marketing technique by offering a proportion of your proceeds to charity on a certain day. Customers will recognize the additional moral value in buying now rather than waiting. This will strongly incentivize an instant purchase.

7. Using pop-ups

Through artfully curated urgency-inducing copy and targeted deals and deadlines, the sense of urgency can permeate your store. Make sure your customers are constantly reminded of the imperative to purchase your products through pop-ups. This can often be the final nudge they need to buy. 

Whilst pop-ups are much maligned as invasive when you’re building a sense of urgency pop-ups can bolster this atmosphere by appearing as essential prompts. For example, a pop-up could tell a customer that a product they’ve viewed is selling out, or remind viewers of the closing window for next-day delivery.

Signing off

Urgency is a powerful motivator in eCommerce, so tailoring your store around the ideals of urgency shouldn’t be left to tomorrow. Integrate the language of scarcity and urgency throughout the copy you’re using on your store, from the landing page to the product details. There are so many ways to instill urgency so make sure every discount and every deadline is geared towards this psychological strategy. Don’t wait: it’s a matter of urgency.

Taking action at the appropriate time is critical to turning your visions into a viable reality. However, doing so without a proper strategy can be a recipe for disaster. 

A well-designed and concrete action plan that weighs all the benefits and possible challenges is the key to executing your vision successfully. Furthermore, it makes tracking progress easier, which in turn helps you attain your goals. 

Whether it’s a business, personal, or career goal you are going after, the right action plan can be your roadmap to success. A comprehensive plan details all the information regarding your objectives and projects, such as the resources required, the complexity level of tasks, etc.

Let’s figure out how you can build one to achieve your goals successfully and efficiently.

What is an action plan and why is it important?

An action plan serves as a trajectory for the tasks or steps you need to accomplish to reach your goals and objectives. It is a crucial part of your strategic process that helps you improve teamwork planning significantly. Also, a proper action plan allows you to manage projects efficiently.

You have all the essential information in a centralized location that your team can access, making it easier for everybody to monitor progress and plan things successfully. As your company grows and circumstances change, you can revisit and make modifications to meet your latest requirements.

Planning of action items helps you prepare for any obstacles ahead. You’re your teams on track while ensuring impactful results. Furthermore, it also boosts your productivity and keeps everybody focused on urgent tasks.  

Here are some of the reasons why an action plan is vital for you:

• It gives you a clear sense of direction by highlighting precisely the steps you need to take when you need to take that and what it will help you accomplish 
• Having your objectives and goals on paper with structured steps keeps the team members motivated and dedicated throughout the project
• You can gauge your and member’s progress and contribution toward the collective goals
• You can turn your visions into reality, increase accountability and efficiency within your organization

How to create an effective action plan 

When it comes to creating an action plan, various practical methods and tools can help you develop a robust action program. Begin by following this straightforward 7-step strategy.

Following these steps for structuring your action plan incidentally also acts as a brilliant roadmap for your idea’s overall presentation and can effectively create a clear goal.

1. Define your scope

It is essential to define your scope, create a roadmap, and align it with your strategic planning. Make sure your actions guide you toward company goals. Start by gauging how your team members can contribute and help you achieve your objectives.

If you don’t have a clear understanding of what you want to achieve, it might be challenging for you to plan a new initiative. Defining your current status and where you see your company helps you analyze the situation, explore potential solutions and implement strategies successfully.

2. Set S.M.A.R.T. goals

S.M.A.R.T. (specific, measurable, achievable, realistic, and time-bound) objectives or goals is a method of objective setting that enables employees and managers to set, monitor, and achieve their long-term and short-term goals. This approach brings tractability and structure together.

Once you map out your plan, scope, and aim to accomplish, the next step requires you to set well-defined goals and measurable tools. Create a template to highlight all the tasks that your team needs to perform and deadlines.

It is vital to make sure that your entire team is on the same page, involved in the process, and has access to the document. This way, the projects become manageable while also boosting team productivity.

Furthermore, ensure that the tasks are attainable. If you have more complex tasks, it’s essential to break them down into manageable parts for easy execution. 

3. Visualize your plan

Once you plan on the action items, prioritize tasks, and set milestones, the next step is creating a visual representation of your action plan. This visualization helps you engage your team and allow everyone to follow through to carry out activities.

A graphical presentation also makes it easier to get a bird’s eye view of your project. This way, you can identify your objectives and tasks that you weren’t able to execute or reach, allowing you to prioritize them to accomplish them.

You can elaborate your action plan with the help of a concept map that can help you explicitly communicate all the essential elements and information — task owners, tasks owners, resources, goals, objectives, deadlines, etc. Also, make sure the document is easily accessible to all. 

Additionally, you can also leverage online visual collaboration platforms to help you seamlessly visualize and structure your simple and complex concepts.

4. Prioritize your tasks

It is imperative to align all your activities with specific goals and assign them to relevant team members. When you list and prioritize all your tasks, it helps keep track of your projects’ status, progress, and completion. 

You could also structure your task list by importance. This way, everyone knows what needs to be done first to meet your deadlines effectively while ensuring that your employees can manage those tasks. That way, your team will also know their responsibilities and tasks to get done and engage them with a clear vision.

5. Set milestones 

Milestones are the objectives that your team aims to achieve to keep a specific project progressing at a steady pace. Your work will have a lot smoother flow when everybody is clear with goals.

When you set milestones, it serves as mini-goals that help you achieve your central goal towards the end. Adding milestones to your action plan is crucial to give your team members something to look forward to and encourage them to stay motivated throughout.

6. Identify your resources

Before starting your project, it is imperative to ensure that you have the critical resources to complete the tasks successfully. And if you don’t have adequate resources, devise a strategy to leverage what you have effectively. Include all the essential components such as the number of projects, budget, timelines, etc., to make sure you don’t miss out on vital aspects.

Knowing what you have to work with will ensure that any tasks or projects you set out to accomplish have a better chance of succeeding. If you don’t have enough cash, a large enough team, or even enough time to manage every project, you’ll soon find yourself struggling to meet milestones and deadlines.

7. Monitor, gauge, and update

It is pivotal to allocate time and resources to evaluate your projects’ and teams’ progress. Make sure you conduct frequent follow-ups with team members to see if everybody is on track. 

For this reason, you need to elaborate on the follow-up and assessment of teams in your action plan. This will help you implement the strategies that work well and eradicate the ineffective ones.

A guide to reaching your goals

An action plan is an indispensable tool that helps you guide your way to realizing your goals. It turns your visualization into actionable steps and milestones. 

From larger departments in an organization to individual employees, an action plan is a defined methodology that helps you outline your activities, tasks, resources, budget, objectives, etc. This, in turn, allows you to achieve desired outcomes.

Oh, chargebacks. They can feel like a strangling noose around the bottom line and profit margins of business merchants. It’s been a challenging year, and small businesses face different difficulties, from having to shut due to Covid-19 to the struggles of securing Government loans to stay afloat. Another cash suck is presently on the rise in the form of credit card fraud.

A prevalent and stressful issue is chargeback fraud, also known as “friendly fraud.” Any business that sells online has to take control of chargebacks. Why? You made the sale, accounted for the revenue already, only to be forced to give back the money and even pay a fee on top of it all. Not only do too many chargebacks damage your reputation with credit card processing companies, but they can also affect your business bottom line. But let’s start with the basics. What exactly is a chargeback?

What are chargebacks?

A chargeback is a term used when a customer disputes a charge on their credit card. When a dispute is made, you (the merchant) reverse the transaction while the customer gets their money back. In many ways, chargebacks favor cardholders’ safety, as the risk of forced fund reversal pushes merchants to provide exceptional services. 

How a credit card chargeback hurts your business

A customer might request chargeback even when there has been no fraudulent activity. They may do so simply because they weren’t satisfied  or believe your product or service was wrongly represented. Some can even request chargebacks if they didn’t recognize the charge on their statement.

As a business owner, you need to take chargebacks seriously. Why? When you’re hit with a chargeback, you don’t only lose the dollar that was disputed, you also lose money on chargeback fees, as well as the money, and time you spend packaging, delivering and selling such product or service. 

If you get a little too much, and your chargeback ratio (total chargebacks divided by total sales) reaches a certain level, you’ll either lose your merchant account or get charged higher processing fees. Losing your merchant account means you’ll have to find another processor that accepts ‘high risk’ merchants.

Why do chargebacks occur?

From fraudulent transactions to defective goods, chargebacks can occur due to many different reasons. To take a step in reducing or preventing chargebacks, you need to understand why customers may want to initiate one against transactions with your business.

Major card networks like American Express, Discover, Visa, etc., create reason codes, an alphanumeric string of text to explain why a specific chargeback occurred, and what documentation a business needs to provide to challenge the dispute.

Chargeback fraud

As stated earlier, chargeback fraud or friendly fraud is on the rise. But there’s nothing ‘friendly’ about fraud — fraud is a fraud, plain and simple. Of course, customers make mistakes and can file for chargebacks accidentally, but that’s the exception and not the rule. 

The term friendly fraud came to be as a way of categorizing customers who file for chargebacks either due to confusion or to commit theft. Because the system is designed to favor cardholders, the chargeback process can make it challenging for businesses to defend themselves. Some customers claim:

• The product doesn’t match the description
• They never received the order
• They canceled the order, but it was still delivered.
• A family member made the order without their consent.

Poor customer service

Sometimes, plain lousy customer service is enough to cause a dispute. Customers who’ve had their messages and emails ignored, encountered an unpleasant representative, or had to wait on hold for a long time can initiate payment disputes.

Fulfillment issues

Fulfillments that include packing, shipping, and delivery can come with product damages, late deliveries, or even non-delivery, which can cause chargebacks.

Actual fraud

When a fraudster purchases from you with a stolen legitimate cardholder’s information, and the item gets shipped to them, the legitimate cardholder identifies the purchase as illegitimate and files for a chargeback.

Your battle strategy against friendly fraud depends on you putting needed fraud protection measures in place. You also need to have efficient and easy access to every transaction data required to debunk the unscrupulous customers’ fraud tactics.

How to prevent credit card chargebacks

Since you are not going to get back your merchandise or service rendered. Because of various processing fees imposed by financial institutions, some chargeback claims can cost you more than the value of the transaction itself. Therefore, you need to take protecting yourself seriously! Just as brick-and-mortar businesses put solutions in place to prevent theft, you need to do the same for your online business. Here are some steps to take:

1. Have an easy-to-understand refund policy

If you want to avoid chargebacks, you need to display your refund policy on your website, register, and print the details on every receipt. Clearly state the time window for returns, exclusions, restocking fees, and be as specific as possible.

2. Create clear billing descriptors

As simple as that may sound, having a clear merchant descriptor (a simple line that identifies your business name on the cardholder’s statement), date, and the transaction amount will eliminate unnecessary disputes. Asides from that, you need to meticulously keep records to help you fight back when chargeback issues arise.

3. Maintain well-defined shipping expectations

A lot of customers expect lightning-fast shipping these days, majorly due to the Amazon effect. This is why you must make your anticipated shipping times clear. Provide a copy of your shipping policy after every purchase and put it on your website as well.

4. Address customer issues promptly

Never leave customer emails or calls unattended. Nothing is more frustrating than trying to make a complaint and not receiving any response. Create automated email and phone systems to let the customer know when to expect a callback.

5. Implement a multi-layered fraud prevention strategy

Technology comes in to save the day when it comes to actual fraud, e.g., in case of stolen identities, card details, etc. In this case, both the customer and business are victims, but then your business is left footing the bill. The best option is to arrest the situation early and catch the transactions before they ever go through. Some solutions to turn to are:

Address verification service (AVS)

This reduces risk by checking the billing address listed in the particular transaction against the issuing bank’s address. If that doesn’t match, the transaction is flagged as possible fraud. Always request customers provide their shipping and billing addresses, then wait for the AVS check before the transaction goes through

BIN database 

As a merchant, keeping your chargeback ratio as low as possible is excellent for your reputation. Customers feel safer in their transactions due to the extra level of security provided by BIN checks. What a BIN database does is that it uses the first six digits of the 16 digit card number to verify the legitimacy of every card, be it credit, debit, charge, or gift card. An extensive bank BIN lookup can help you check the authenticity of questionable orders, such as orders to regions entirely different from which the card was issued. The transaction can then be reviewed, and necessary procedures are taken to prevent you and your customer from falling victims to fraud.

IP intelligence

You can block suspicious transactions from fraudulent IP addresses through an in-depth analysis of addresses to monitor risks associated with such locations.

Credit card verification code 

Your payment gateway should require buyers to input their CVV number at checkout. Since merchants or the payment processor cannot store customers’ CVV, they have physical possession of the card being used for the purchase.

Verified by Visa and Mastercard secure code 

Both tools require the customer to input a password before completing their checkout process. Although exclusive to e-commerce businesses, using this tool can help protect your business from chargeback frauds.

Prepare your business to manage chargebacks 

Although dealing with chargeback claims and fraud can be daunting and time-consuming, businesses that don’t take the time to manage disputes and keep their chargeback rates low can experience painful losses to their cash flow and bottom line. You must respond quickly to retrieval requests and chargebacks. Protect yourself today!