Small business secrets...

With the festive season well in swing, now is the time that people look back on the past 12 months. For many small business owners, 2012 was a tough year. Even some of the big boys didn’t survive - this year we lost electronics giant Comet, with other brands like Clintons, La Senza and JJB barely hanging on after calling in administrators and closing many of their stores. But it seems there is a glimmer of hope in 2013, especially for small businesses or those hoping to start up.

I have always been an advocate of online review sites, so read with interest this week the story of a customer who was sued $750,000 for leaving a negative review about a company. The customer had wrongly accused a contractor of stealing from her home, in a review that apparently cost the company $300,000 in lost revenue. It just goes to show how visible online reviews are and the impact they can have on sales.

When I started up Euroffice and XLN Telecom, talent acquisition wasn’t my top priority. Over the years I’ve realised that small businesses in particular cannot afford not to have top quality team from day one. Successful companies are no different than sports teams, where the team with more A players is more likely to win.

For businesses, the ultimate goal is not just gaining a large amount of customers, but a large amount of customers who are loyal. Last week I wrote about loyalty, and how I believe it should be rewarded. Unfortunately, in some cases customers are actually being punished for their loyalty, and there are many ways this can happen - including what I believe is a scam based on a common practice among many including utility, telecoms and card processing providers.

As a business owner, it’s all too often that I notice companies losing touch with their customers. Unfortunately I was on the receiving end of this recently with Addison Lee, a taxi company I have been loyal to for around seven years.

Over the last few months, controversy has slowly been building around the amount of tax paid by large corporations operating in the UK. It all came to a head yesterday when three of the main offenders (Starbucks, Amazon and Google) were questioned by the House of Commons Public Accounts Committee. As taxpayers, we all feel a little cheated by some of our favourite household names. But I can’t help but think that, yet again, it’s the small businesses that are taking the burden.

Entrepreneurs are more firmly in the spotlight than they have ever been thanks to TV shows such as Dragons’ Den, which is currently back on our screens. Entertaining as it may be, I worry that the show could actually be damaging to young entrepreneurs of the future, and the digital industry in particular.

Most of us have been on the receiving end of appalling customer service. There are few things more annoying than having to navigate long-winded phone options and phone queues, then to be transferred from pillar to post in an overseas call centre hoping you will finally get to speak to a competent staff member.

When I started Euroffice and later XLN Telecom, we were startups with no employees facing global competitors such as Viking and BT, respectively. Both were well entrenched market leaders with little concern about startups disrupting their traditional markets.

For any business, the most valuable asset is its customer base. It takes years to build up a loyal following and to organise all the relevant details effectively. Yet too many small businesses overlook the importance of a well-managed system for customer information.