I recently ordered some shoes for my four kids online from Zappos, the shoe store.

If you wear many hats in your business like I do, you might find yourself short on time when it comes to things like shoe shopping.

You might be a bit nervous about ordering shoes online without being able to try them on, make sure they fit, make sure they’re comfortable, and so forth. I really was.

What I found when I visited the Zappos website surprised me. It’s an incredible company with some really creative ideas and solutions.

Zappos must have realized that ordering shoes without trying them on first can pose some challenges to shoe shoppers. So to compete with retail locations, Zappos has made the shopping experience easy and even pleasant.

My Zappos Experience

My parents bought a set of super cute pink, white, and black Heely’s for one of my daughters and had them shipped to us. The shoes arrived for her birthday and were a bit too small.

I called up the Zappos toll-free number, and the lady that I talked with was extremely friendly. She sounded like she was having a great day at a great job.

She emailed me a return shipping label while we were on the phone together. Then she told me that she would upgrade me to a VIP customer (understand here, that I myself had never ordered from Zappos at that point — mom had done the ordering). She sent the correct size of shoes overnight to me so that my young and disappointed daughter would have them right away.

And she did that before I even sent back the shoes that were the wrong size!

All I had to do on my end was put the shoes back in the box that they came in, print out the shipping label from my email, and drop the whole thing off at the UPS store. Zappos even paid for the return shipping!

The Heely’s arrived the next day, my girl was thrilled, and I decided to buy some shoes myself for the kids.

The Power of Being a Zappos VIP Customer

When I went online to order, I still had my VIP status. That means that when I purchase anything, it’s shipped to me overnight. Free of charge. Anything that I have to return is shipped back on the Zappos nickel, and whatever exchange I need is also shipped to me overnight free of charge.

Zappos solves a problem with the free overnight shipping policy. Retail shoppers are often have an “instant gratification” mentality, meaning that shoppers want to buy something and take it home right now. Shopping online usually means that a shopper has to wait for the order. But the Zappos overnight shipping gets the product to the shopper as fast as possible.

Choosing Shoes

I picked out the shoes for the kids using the awesome selector tools on the Zappos site. You can input choices like color, size, style, heel height, etc.

They’ve really simplified the process of looking through pages and pages of so many types of shoes. I always like tools to save my time and my eyesight!

The shoes were shipped out overnight as promised, and the kids were thrilled. The only setback was that I ordered the wrong size for my littlest one.

Another Call to Zappos

I called the toll-free number for the company, and as I listened to the computerized menu choices to get to the right department for my needs, I heard the last choice, number 5. You push number 5 to hear the joke of the day! I did actually choose 5 on the first go-round, and indeed it was the joke of the day! (I did call back the next day to see whether or not they had a new joke of the day, and they did).

While chatting with the very nice and very enthusiastic customer loyalty gal, she emailed me the return shipping label and info for the pair of shoes in the wrong size. She had the correct-sized pair sent to me overnight once again, and she suggested that I wait for that pair to get to me so that I could use the box to return the wrong pair (the box the original order came in was a big box with several pairs of shoes).

I am Now a Loyal Zappos Customer

I am now a firm believer in Zappos. They have a great selection with competitive prices, an easy-to-use website, and a really great customer loyalty team (that’s their title for that department).

What’s the Real Point?

Here’s the real point of this little story: Zappos has adopted an original business approach, finding ways to create excitement and loyalty from their customers, even though they are in a market traditionally cornered by brick and mortar retail locations.

They didn’t focus on all of the reasons that an online shoe store won’t succeed; instead they have found creative solutions for those things that looked like limitations and turned them into ways to win the customer’s loyalty.

Take a Look at Zappos Core Values:

As we grow as a company, it has become more and more important to explicitly define the Zappos core values from which we develop our culture, our brand, and our business strategies. These are the ten core values that we live by:

1. Deliver WOW Through Service
2. Embrace and Drive Change
3. Create Fun and A Little Weirdness
4. Be Adventurous, Creative, and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With Communication
7. Build a Positive Team and Family Spirit
8. Do More With Less
9. Be Passionate and Determined
10. Be Humble

How’s that for a set of company core values?

A reader of my previous articles on non-profit organizations asked, “Why would someone want to form a non-profit organization and not want to become a 501c3?”

What is a Non-Profit?

Simply put, a non-profit — or not for profit — is an organization that does not distribute its profits to shareholders or owners. Instead of distributing taxable wealth to owners (like a for-profit company), a non-profit uses profits in order to fund its programs and services.

A non-profit can hire employees and a management team and do anything else required to operate. After all such expenses are paid, a non-profit business treats its surplus money differently than a for-profit business.

Instead of paying profits to stockholders, the “extra” money is instead used within the organization to pay for and expand its programs and services.

Non-profit is a legal status pertaining to how and why an organization is being run. It doesn’t confer tax-exempt status, nor must such an organization necessarily pursue tax-exempt status.

What is a Tax-Exempt Organization?

Tax-exempt is a taxation status. Tax-exempt means that your organization will not pay regular income taxes on monies left over after expenses are paid.

While you may be running a non-profit organization in terms of how you handle “extra” funds, you might or might not have a need to obtain tax-exempt status.

Your organization will be doing things to raise money to afford the products and services you want to offer, and some of that money will be used to pay your employees or marketing or other operational costs. After those things are paid, you have a profit.

Do you want that profit to be taxed, or do you want that profit to be tax-exempt?

If you want the Internal Revenue Service to exempt your organization from paying the same taxes as other businesses, you must seek approval for one of the many tax-exempt statuses available. The most commonly known tax-exempt status is 501c3.

You apply for 501c3 status with the IRS. If approved, your organization will be tax-exempt. As I explained in Now You’re Ready for Tax-Exempt Status, having a tax-exempt status does not mean that you don’t have to file with the IRS. You will have to file, and you will have paperwork.

Do I Need Both Non-Profit and Tax-Exempt Status?

Again, your organization can be non-profit and tax-exempt, or it can be non-profit and not tax-exempt.

You will have to weigh the costs versus the benefits against the objectives of your organization. These are not decisions to be made lightly. However, these decisions can be changed as your organization grows and perhaps changes some of its objectives.

BusinessDictionary.com defines a business system as:

Methodical procedure or process, used as a delivery mechanism for providing goods or services to customers in a well defined market.

What does the definition really mean?

Let’s look at each part:

• Methodical procedure or process – A step-by-step sequence of actions.  You have a defined set of steps you follow each time you do something for a customer.
• Used as a deliver mechanism for providing goods or services – Simply, the way you do something so that you get paid.
• To customers in a well defined market – You know to whom you are trying to sell your goods or services.

Many of us first think of starting a business as a solution to some situation in our lives.  Maybe we lost a job or got re-located, or maybe we started a family and would like more time with our kids.  It could be that we just don’t like our boss anymore.  And some of us saw that we could fill a need for customers and take control of our own fortunes by not working for someone else’s business anymore.

There are as many reasons for starting businesses and many businesses types. However, there are few business systems.  I have seen and experienced lots of businesses, which lack a system, including some of my own.

How often have you heard something like, “Mr. Smith is the business; without him, the business would cease to exist”?

And how often have you thought or heard someone else saying, “I just can’t trust anyone else to get it all done the right way”?

If you went into business making some product or offering some service that you just happen to love or know lots about, you might not have thought at the beginning (or even now) that you also need to have a business system.

Plan for Success, Not Failure

The idea is to plan for success.  Too often, we worry about failure and what will happen if it doesn’t all work out.  The real problems begin when we have terrific success but we wear all of the hats in our business and can’t keep up with the demand for our product or service.

So, instead of worrying about failure, start planning for success.  It’s time to get the business out of your head and into a concrete system.

The Internet and the use of computers and other technology have brought unlimited resources for building some kind of system.  You don’t have to jump into anything too huge, but you do have to jump in.

Think about such things as:

• Do I have a concrete formula for pricing?
• Can someone else pick up where I’ve left off if suddenly I can’t work?
• Am I able to show someone else what I do in a way that they can understand?
• Is it possible to organize client information so that it is not just “floating around” in my head?
• Are my sources, such as vendors, organized with contact information, pricing, and the other necessary details so that someone else could see how to order what my business needs?
• Can I take some time off from my business and still keep the money coming in?  Or does the business stop and stagnate and possibly lose momentum if I don’t show up to work today?

Think as an Entrepreneur Thinks

Have you considered that it might be possible to set up your business in such a way that you can show other people how to run it, and then you can spend your time doing all of those things you thought you’d be able to do once you stopped working for someone else?

Have you considered that you can train someone else, if you have a solid system for fulfilling the demands of the business, and then spend your time building another business?

It is possible to think like an entrepreneur rather than someone who just created their own J.O.B.  It just takes a little planning.

“What records do I keep?”, “How do I keep each type of record?”, and “How long do I keep each type of record?” are questions clients ask all of the time.

Our accounting team regularly helps business owners with guidance on good record maintenance.

We’re all trying to control our costs and liabilities through good record keeping.  In my business, I aim to make record keeping as efficient as possible, so that my whole team can keep up with what’s going on with each client.  It’s a lot to think about.

You can see one great article that my head accountant John Murray keeps showing to me as well as our clients by clicking here.  It has a great chart of the type of record and how long to keep it, as well as which ones can be kept electronically.

Most of us know that we should keep our receipts and our employee records.  We know that the IRS and other governmental agencies could ask to see this stuff.

Have you thought, though, about what happens if a lawsuit comes up against you or against one of your customers?  Did you know that records you keep can be demanded for a lawsuit, not only against you, but against you clients?  Your records can be subpoenaed.  Keep that in mind when you keep records longer than necessary.

Keeping records is important, but so is regularly destroying records on a regular schedule, as well as how you destroy them. Invest in a shredder or look into a paper destroying service.

I have a CPA friend in Arizona who visits a local paper mill; he watches as his old documents are put into the paper pulping machine.  The paper mill gets free product to recycle, and he gets his documents destroyed for free. His old un-needed tax documents are turned into toilet paper.

Hopefully this will help you out with the general rules of thumb on record keeping, but as always, do not hesitate to give us a call if we can help you as you implement your plans.

We’ve been talking about how to organize a non-profit endeavor. I’ve brought you information in previous articles and tried not to be too long-winded. But on the subject of grants, I need to rant.

Many people have heard of “free grant money.” I receive in my email numerous messages about available grant money, in the form of government, corporate, and private grants.

I also hear first-hand accounts from people that were “sold a bill of goods” from a company that “specializes” in helping organizations apply for available grant money.

Too many people have lost money trying to get a “free” grant, so I want to share with you some things to watch out for when you consider applying for grants.

Grant Truths

These statements are true:

• Grant money is available.
• It’s money that you don’t have to pay back.
• It’s money that governmental agencies, private companies, or public companies hand out to organizations that fit specific criteria, set by the group giving out the money.
• Those groups give out the grant money and then claim it as a benefit on their own tax return.
• They set the criteria for the organizations that receive the money.

More Grant Truths

When you are thinking about applying for grants, you have to use some common sense. While it is possible to apply for and receive a grant, the grant industry as a whole is not completely forthright about how it all works.

Not everyone who applies for a grant is going to receive one. The companies that are giving grants not only have a set of criteria for the kinds of organizations they like to support, they also have a set of criteria they must follow so that they get their tax benefit.

Timing is important too. Grant applications have deadlines by which you must apply for each grant. If you miss the deadline, it doesn’t matter how great your organization is; you won’t be able to get the grant.

Who Gets the Grants?

Many of the grants out there must be given to non-profit organizations that are recognized by the Internal Revenue Service as a tax-exempt entity; otherwise, the company giving the grant cannot use the write-off on their own tax return. Grant companies and their salespeople don’t always tell you that. They will let you try to take a for-profit business through the process; after they have collected your money they will tell you that if you set up a non-profit organization, your chances will improve. Then they will sell you non-profit structuring services.

What is the Grant Writing Industry?

Applying for a grant is like many bureaucratic processes: you have to do a lot of paperwork. The paperwork can be really time-consuming, especially if you don’t know how to do it. You can hire grant writers to prepare all of the paperwork that you send in to apply for a specific grant, and a good grant writer knows the steps that are required and how to complete them.

The grant writing industry has grown substantially in past years, and it will grow even faster as we keep working through our economy problems. Business owners are looking for solutions to their financial problems.

A Great Telemarketing “Business”

Typically, businesses are contacted through telemarketers or online advertising followed with a telephone consultation. At the phone consultation, the business owner is told that many grants are available for their type of business and in their geographical area. The consultant will advise the potential customer that he will run the owner’s information through the “database of available grants” and then call them back with possible available grants.

After that, the consultant will lure the prospective customer with some dollar amount of grants that came up on the database search, telling the business owner that all they have to do is write the grant applications and apply.

Of course, the grant company will take care of all of the grant writing and applications for a modest fee, usually somewhere between 1500 and 5000 dollars. (I did work with one client who paid 20,000 dollars for the grant writing services).

Is it Really a Scam?

How these grant writing companies stay on the fringe of legality is by charging you a fee for doing all of the paperwork for you without any guarantee of your receiving a grant.

How these grant companies take advantage of you is by hyping up the idea that you can get a grant that is just waiting for a business like yours.

They will explain to you that it can take a year or two for you to get approval on a grant, depending upon the calendar schedule for specific grants and how many people are applying each year for those grants.

If you don’t get the grant, it won’t be because the paperwork was not filled out correctly. That’s how the grant writer is absolved.

They will also promise you that if after the first year, you haven’t received a grant, they will continue to help you during the second year. This of course, is not that hard because they really don’t have to do anything.

How to Spot a Scam Artist

Knowing when you are talking to a legitimate grant writer and a sketchy company is a hard to determine. Most of those companies employ decent, and sometimes great, salespeople. The potential client wants to hear how easy it’s going to be to get a grant. That makes the sales guy’s job even easier.

The thing to watch out for is how you and the grant writer find each other. If you were contacted by an automated dialer that asked you to push “1” if you are interested in free grant money, chances are it is not a good idea.

If you are contacted through an email that showed up in your junk email folder with a subject line that says something like, “Get your free government money”, chances are it is not a good idea.

Do Your Research

Always remember to look for bad press on the grant writer and do your research.

• Check with scam alert websites, the Better Business Bureau and with other consumer protection sites.
• Check with the governmental agencies or companies to see if they really are giving out a grant for a group like yours.
• Look to non-profit organizations that help non-profits with applying for grants.
• Ask the grant writer for references.
• Ask how long the grant writer has been in business, how many clients he has, and what percentage of grants he writes actually receive a grant.

It’s important to work with companies that you trust and that you feel good about. That’s true when we hire any professional to help us. If you don’t trust the person selling you on the service, it’s possible that you don’t have a good fit. Look for another company.

If it sounds too good to be true, it probably is!

Honest grant writers will not need to oversell you; honest grant writers will explain to you how grants really work, and that you might want to think about other funding options along with the possibility of getting a grant.