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Create a Win Win for Small Your Small Business
Discover How Specialized Cost Containment Creates A New Win-Win Position For Property Owner’s And You
Property Management: A simple strategy to increase client loyalty
By Gary L. Goldsmith
Property managers who pro-actively employ...
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A recent iLogos Research study revealed 94% of Fortune 500
companies now hire employees online, a stark contrast from 1998,
when only 29% of them were doing the same. If you own or manage
a small business, that means the vast majority of your...
Latest California Small Group Health Insurance Strategies
What are some the latest Strategies being used by Small Business owners in California to make their group health insurance premiums more efficient?
1. Health Savings Accounts (HSA)
This is a strategy where the employer buys a health plan...
Medical Billing Specialist
The lodestar of a medical billing specialist is trust. Though much of the work required of a medical billing specialist entails scanning, copying, filing, transcription, and other tasks we may view as thankless are actually essential to our...
Outsourcing NOT Just for Big Business
Outsourcing has become a controversial issue and a hot topic among presidential candidates this year. But have you stopped to think how your business can benefit from the efficiency, functionality and cost savings of outsourcing? If you have,...
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Bankruptcy And The Small Business Owner
October 17th is fast approaching when the new bankruptcy laws take place. What effect will this have on the small business owner? Probably a more major effect than before. My husband and I both own small businesses. In the previous years, we have always had clients that paid on time. This is the first year that we have seen the economy really effect people.
Small business owners have to worry about whether their customers are going to pay. How do you know if your customers are going to pay? Whether you are a new small business owner or been around for a couple of years, this is still an issue that comes up. Here are a couple of suggestions that should help with the foundation of your business:
1) Initially when you meet with a client, you state up front the payment arrangements. This could be whether you are paid COD, upon completion of a job or within a certain amount of time.
2) Once you have completed the first job or two, see how the client pays.
a) Did they pay on time?
b) Did you have to send them a reminder invoice stating they were overdue?
c) Did you have to repeatedly call three or four times? Then when you got the check it was returned for non-sufficient funds?
d) Did the client make good on the non-sufficient funds check?
This could possibly happen to you. The idea is to get clients that pay on time and even ahead. If you have a client you have to remind every now and then, that is acceptable as long as they pay. However, if you have a client that pays you late and the check is not good, you want to be wary.
This last type of client is not a client you want to keep or get more of. Why? In our situation, the client came to us a second time with a crucial job and really needed help. The first check they gave us they made good on. We completed a job for them and we were assured we would be paid. Then when it was time to get paid, the client’s phone number had been disconnected. We did some research and later found out that this
particular client was being sued by the building management where they had their office. In the end we found out that they had filed bankruptcy.
Looking back at the situation, we knew the first time when we had problems getting paid that we should not continue to work with them. However, the second time we were trying to be nice and help them out of a situation. Now, we are out of the money for doing that client’s job.
As a small business owner, you cannot afford to have many or any clients like this last client talked about, they will send your business into bankruptcy. Take the time to know and understand your clients. If you have to ask for references from other vendors they have used, by all means do that. Another alternative for a new client is to have them pay COD until they have established a history of paying their bills. You will not have to do this with every new client. However, if you believe there is going to be a problem based on conversations you have with the client, you might want to institute such a policy.
Your small business might well be your livelihood and you cannot afford not to be paid. It is important to establish your policy up front in terms of payment. Do not let this be something you think is understood without verbalizing it. If one company ends up having too many clients filing bankruptcy on them and not paying what is owed, that company could potentially end up in bankruptcy as well.
About the Author: Dr. Taffy Wagner is the author of Debt Dilemma. Debt Dilemma is her own personal story of how she got into debt and was able to get out without filing bankruptcy. She will be launching a national marketing campaign on October 18, 2005. View her website at http://www.paidoff.net/SpecialPromo.html for further details.
Source: www.isnare.com
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