If we don’t get paid, we go out of business. So with more debtors delaying payment in these tough times, taking action to collect money should be a top priority for small companies.

Few small businesses can afford to turn customers away, but being timid about stretched credit terms puts your own company in danger. If you’re not being paid on time it’s harder to find money to settle your own outstanding debts.

You didn’t start your business to provide a free credit service to suppliers. But how can you collect money owed, and at the same time, avoid bad feelings developing from previously reliable customers who are falling behind? Try these simple in-house strategies:

1. Review payment terms
Re-assess your payment terms for the current market conditions. It could be time to offer additional payment options, such as PayPal, debit card, or to accept additional credit cards (with an appropriate added fee). Consider putting new clients on tighter payment terms on a trial basis with a review to follow, include a small discount for on-time payment if you can afford it.

2. Avoid firm tactics with regular customers
Your regular, normally reliable, clients deserve different treatment in debt recovery. Perhaps they came on board years ago with a handshake and now seem like ‘family’? Try co-operation and communication, rather than a heavy hand. A phone call from the director will strengthen relationships between valued but dawdling customers and is a chance to personally explain the impact of late payments on your own cycle and survival. Be ready with options for part-payment or a suitable suspension of supply. Be concerned, but stay firm enough to get the account settled.

3. Credit-check all new clients
It’s worth the fee to do a background check on new clients, despite the temptation to automatically take on anyone new when business is slow. The cost of your staff’s time chasing money and the potential price of debt collection later is not worth the risk. Besides, a reference check should be accepted as ‘company policy’ by new customers.

4. Focus recovery ‘power’ in the right hands
Avoid the trap of turning your sales people or service staff into debt collectors. Mixing messages about employee roles will do more harm than good in the long term. Give the job of bad debt follow-up to one person, along with a set of clear guidelines for action and your full support.

5. Set terms at the sale
The best time to get the message through about payment terms is when you close the sale. Outlining credit expectations early sets the right tone and foundations for later accounts follow-up if necessary. Make it a prominent part of the contract when customers place orders.

6. Empower your invoice
Instead of a monthly run, consider sending invoices as soon as a service has been carried out or when a product is supplied. Print the actual due date on the invoice, rather than a “within 30 days” instruction. These simple changes will speed payment, improve cash flow and identify problem accounts sooner.

7. Calculate average debt age
You run regular reports to check debt ‘age’, but how do you use the results? To measure average payments against your target terms, divide your accounts receivable by annual sales on credit (not cash sales) and multiply by 365. This shows how efficiently you are managing debts overall, compared with your goal, of say a 30- day payment cycle. A result of ‘55’ for example, will show you are averaging 25 days over your target.

8. Set a collection policy
The chance of recovering payment reduces the older a debt becomes. Establish firm rules for follow-up, such as: a phone call at 7 days overdue; a letter at 14; another call at 21 days; stop supply at 30; write a letter to your collection agency at 60 days. In line with this schedule, set suitable options at certain stages, depending on your relationship with the customer, like part-payment, an instalment plan and whether further purchases are allowed (and their value) if accounts remain overdue.

9. Collect information
Securing thorough information about a new account avoids obstacles to debt recovery. Collect as many telephone numbers and alternative contact names as you can and ensure all forms are signed. If possible, visit the customer’s premises. A personal visit gives a valuable impression of their circumstances that a phone call can’t reveal.

10. Be fearless and survive
Remember, uncollected income is just the most obvious impact on your cash flow. Prevention measures will save you the hidden wasted costs of time spent chasing payment. Don’t hesitate to ask firmly for due payment because you fear losing customers. Non-paying clients are not worth having

Problems with using a tradesperson have been a constant source of complaints to consumer rights organizations. Whether the tradesperson in question is a plumber, a builder, an electrician or one of the dozens of other common trades, it seems that people regularly have an issue with dealing with them.

What is it about tradespeople that results in them being singled as a group generally lacking in the most basic customer service skills? What can they do about it?

Arranging the job

It’s a ‘known fact’ - tradespeople don’t return calls. If you’re a tradesperson you can probably point to good reasons – possibly you already have enough work. Even so, just return the call and tell the customer that. Returning a person’s call is ordinary politeness, and it lets them know they need to look elsewhere for someone to fix their problem; and it might mean they try again in the future – when you could use that extra work.

Arranging the time

Most customers consider a tradesperson’s agreement to turn up at a certain time on a certain day as little more than wishful thinking. If you are not sure you’ll be able to do the job on the time and day agreed then give the customer a courtesy call and tell them when they can expect you. Similarly, because the customer has things to be getting on with as well, if you do finish the previous job early, give the customer a ring and ask if it’s convenient for you to arrive sooner. Cell phones make this basic act of customer service easy and practicable.

If there’s some uncertainty in your schedule give a short range of time - around an hour will be manageable for most customers, but any longer is pushing it. A customer doesn’t want to be hanging around all day waiting for a tradesperson so saying you will be there between 1.00 and 2:00 p.m.  is fine but ‘in the afternoon’ isn’t.

Not showing up – it shouldn’t even be a consideration.

On the job

It’s basic good manners to introduce yourself correctly and professionally when you arrive at the customer’s premises. Just mentioning your name, your company and what job you are there to do will go a long way towards getting the relationship off to a good start.

Don’t treat the customer in a slighting fashion. Listen carefully to what they say and use plain language yourself when explaining technicalities to them. Give them time to think things through and understand why you are suggesting doing things the way you are.

Treat the customer’s home and property as you would your own. Walking through the house with mud caked boots, sitting on chairs in greasy overalls or leaving hand marks on the walls only gets the customer incensed at your lack of consideration.

After the job - clean up

Leaving behind a mess is another concern of customers. The job may look great but what will attract the eye of the customer are the off cuts of wire, carpet or other waste strewn around the floor. If there is an issue in removing the mess, for example because there would be a cost attached to it, then include it in the quote beforehand or, failing that, explain to the customer that you can do it for a cost, or they can arrange it themselves. At the least, tidy up before leaving.

Good service pays big dividends

Do these basics well and you will be above the eighty percent of tradespeople who think customer service is only about doing the technical work. It’s really about pleasing the person who will pay you and maybe recommend you to others. With word of mouth being the most popular method people use to locate a tradesperson, that’s important.

A little thought and commitment to customer service can pay handsome dividends for your business. Put yourself in the place of the customer and think about how you’d like to be treated by someone you had hired to do a job for you.

As marketing budgets are reduced, many companies are turning to public relations as a cost-effective way to get their messages out.
Media releases, also called ‘news releases’ and ‘press releases’, can be an effective part of your company’s public relations program. Unfortunately, most media releases end up in the recycling bin and never make it out of the newsroom. There’s no guarantee that your news will be published or presented, but there are some simple steps you can take to improve your chances.

Find a newsworthy story

A media release is not an advertisement. It should tell editors and journalists your news in an appealing and succinct way. Finding the right story often requires research. Start by looking for interesting and unique developments in your business.

A new location or product might seem exciting within your company, but it may not be so for your audience. If there is something unique or beneficial about your new location or product, then you might have a newsworthy angle. Think about the story from the perspective of your target audience and what will interest them. If you can’t find a newsworthy story now, it’s probably better to wait for the right opportunity.

Write a strong beginning

The most important elements of a media release are the headline and lead paragraph. The headline summarizes your story in a few words and the lead expands upon it with more detail.

A good headline will grab the attention of an editor and make them want to read more. If you have a new product, what makes it stand out from your other products or those of competitors? Is it more efficient, less expensive, more durable, or based on cutting-edge technology? If you are promoting an event, will there be important guests, speakers or announcements?

Wordy summaries are less likely to get read, so you should summarize your news in fewer than thirty words. Good headlines and summaries address the who, what, when, where, why and how aspects of your story.

Support your story with details and quotations

The body of your media release is where you provide facts, quotations, examples and other supporting information. Decide who will be your company spokesperson and include quotations that support your news story. It is customary to introduce your spokesperson with an indirect quote and follow with direct quotations. You can quote another person if they will add insight, but avoid quoting more than two people – this can make your media release too complicated.

If editors and journalists are on tight deadlines, they do not have time to follow up to get additional quotations from your spokesperson. So relevant quotations will improve the chances of getting your story published. When including quotations in your media release, remember that it’s not an advertisement. Stick to the facts and avoid hype and superlatives.

Follow the standard format

Type MEDIA RELEASE at the top of the page, followed by the date, headline, lead and body text (the story itself). Include your contact details at the bottom of the page. You should also indicate the availability of photos, and opportunities to take photos and interview your spokesperson.

Target your media

A great media release is worthless if you don’t send to relevant media outlets. If you have a new product that increases safety in factories, for example, it’s not fitting for your local paper. You will want to target your release to publications with readers interested in manufacturing and factory safety. If you plan to send out media releases regularly, get a hard copy or online version of a media directory that lists media outlets and contacts.

Put it together

Writing an effective media release does not have to be a big challenge. Start with a good story, and write a strong headline and lead. Then follow up with supporting material, especially pertinent quotations. Finally, do the research and target your story to media outlets that have readers and viewers who will be interested in your news.

Making sure you offer customers better value than ever in a downturning cycle often means increasing workloads and tight schedules – frequently combined with some reduction of team numbers. It can seem that there are not enough hours in the day to get the work done, let alone striking a healthy work-life balance.  The good news is that it is possible, but it takes commitment to your own health and wellbeing.  After all, if you become inefficient through weariness and lack of enthusiasm then the very goals you are seeking for your business will drift out of reach.

Schedule breaks in your diary and take them!

Accept you need breaks, different sorts of breaks from short to medium to long ones. Short breaks of 15 minutes are to have a cup of coffee, read the paper or take a short walk. Medium breaks are an hour or so. Do something that relaxes you - workout at the gym, visit a friend, have lunch in the park, read a book.  As for longer breaks – try to schedule a day away from the business at intervals, for no reason other than to take a break.

Set up email filters

Decrease the amount of time and stress spent ploughing through masses of mail. Use your email program to filter spam of course, but even newsletters and joke mails from friends can be auto filed to folders for perusing later.

Turn off email and the phone for set hours

This probably feels like a biggie, but you’ll be surprised at how effective you can be if you schedule in a designated hour or two each day where you deal only with urgent work and pick up on your calls and emails later on.

Set a time to eat

Skipping meals and eating on the run leaves you tired and physically predisposes you to unwanted weight gain.  Neither is very helpful to conducting your business efficiently.  What‘s more, it robs you of precious time for your brain to mull and think, so you lose the chance to tap into your creative energies.  Abandon the computer, get up in time to have breakfast at home – and try to eat at least one meal a day with family or friends.

Call a friend

Keep your problems in perspective by chatting with a friend. If you can’t meet, then give them a call.

Outsource or delegate

Look at outsourcing necessary but non-core tasks e.g. bookkeeping and recruitment. Reduce your workload by delegating tasks to team members – you don’t have to be a jack of all trades, and they might appreciate the chance to learn new skills or vary their daily work.

Practice the ‘N’ word

If you can’t do the job without unnecessary stress, learn to say no, or put an reasonable time frame on the delivery of the work

Our time is the only thing we truly own in life - Gift yourself more time

Work out how long the task will take and then add some again.  By allowing yourself more time you’ll reduce stress, avoid overloading yourself.  Better still, you might end up delighting your customers by delivering ahead of schedule, and you will avoid disappointing them by falling behind on your promises.

Construct a cash flow budget starting with a properly structured balance sheet that has all the detail, from inventory and debts, to interest costs. Update and review it regularly using conservative revenue and expense estimates. Rule of thumb: the greater the cash flow uncertainty the business faces, the more often a new cash flow budget should be prepared.

Web Pick of the Month

Do you and your team have the opportunity to do what you each do best every day? Chances are, you don't. Uncover your natural talents via this online report:  http://www.strengthsfinder.com/