Getting paid quickly

     Free daily tips, information, advice, and ideas,
     with examples drawn from small businesses.

     In service businesses and small manufacturing operations, you do the work and then you frequently wait to be paid. The wait can be long. Meantime, your payroll and other bills continue.

     This is particularly true when you are dealing with large companies. They have procedures, and your bills get in line somewhere in the bowels of accounts payable departments.

     There are some things you can do to speed up payments to you. Here are three things I have done in businesses I've operated.

     1. Change your terms. Offer a 2% discount for payment within a short period of time. I've used 2%-10 days to good effect. When invoices arrive at a big company's accounts payable department, those offering discounts get quicker attention. For you, it's a way of using their system to prioritize payment to you. You can also use 2%-30 days to good effect.

     2. Set up progress payments. If you are providing significant inputs of labor and materials to accomplish a job that is stretched out over time, set up contractual milestones that trigger partial payments as the work progresses. As project phases are completed, send appropriate invoices, referencing the negotiated agreement. I've used this in a printing operation where big jobs could stretch out over several weeks. Construction businesses use this all the time, as do consultants in various fields. 

     3. Develop a close relationship with the contact you deal with in a big company. This is key. The contact might be a low level manager or a senior vice president. But if you're not being paid in a timely manner, a face-to-face conversation with your contact in the big company can put pressure to get your invoice paid. Calls to the accounts payable department will be of little value to you in resolving the problem. 

     I once had a serious conversation with a senior vice president of a major corporation about this. His company was three months in arrears and still ordering. He had approval authority and he would sign off on bills and forward them to the accounts payable people. There, they would linger. In our conversation, I said to him that I was continuing to provide services, but it amounted to providing financing to his company. He suddenly understood and corrected the situation immediately. 

     In a way, my small company was acting like a bank for his big corporation. By not paying my invoices, they were in effect getting a loan from me. In their scheme of things, delaying payments to many small suppliers results in big effects with them. Big companies do this all the time with their small suppliers.

     Getting paid in a timely manner is crucial to the on-going health of your small business. Don't ever yell at your customer, but use some quiet pressure ways to keep them paying you in a timely manner--and coming back.   

Going after referrals

     Free daily tips, information, advice, and ideas,
     with examples from small businesses.

     Business owners know the value of referrals. When someone is referred to you, they arrive pretty much open to your products/services.

     They show up on someone else's recommendation. Referrals come to you because some third party has told them something good about you.

     Referrals are a natural part of human interaction. We talk to each other, and we talk about each other. We want to share with others our thoughts, feelings, ideas.

     Social media like Twitter and Facebook provide a mechanism for these interactions. But there are some other ways you can promote referrals in your small business.

     Example: Mary is a nutritionist. To connect with new clients, she regularly gives informational talks and sessions at wellness centers, senior centers, organizational meetings and other venues. She take lots of questions, makes future appointments, and hands out literature. All this results in people subsequently talking about her in the community and referrals come in. These activities speed up a naturally-occurring process, and they are in addition to her Twitter and Facebook accounts. 

     Example: Ralph is an electrician. He works alone, carrying his tools and equipment with him to jobs in his van. He targets homeowners and small businesses, handling their electrical problems and needs. Every time he finished a job, Ralph meets with the customer, explaining the work and answering any questions before presenting the bill. Then, he hands the customer a half-dozen business cards asking that they hand them out to friends, neighbors, and other business owners. It's a simple process, but it has worked for Ralph. People who receive his business cards call with jobs to be done.

     Example: Eric takes a more aggressive approach to getting referrals. He is an interior designer handling residential and commercial clients. When he finishes an assignment, he asks for referrals and frequently receives a couple on the spot. Then, in about three months, he calls the client again, asks if there's anything else he might do for them, and, again, asks for referrals. Not only does this provide client follow-up, but it results in more referrals. He also maintains relationships with several real estate agents who pass on to him referrals of new people moving into the area.

     These examples show how some older methods can help you get more referrals. There's more to life than Facebook and Twitter. Use them, but don't neglect some opportunities that have worked well in the past.

     You'll find other ways of going after referrals scattered throughout these write-ups. Referrals are an important part of your on-going business promotions.  

Managing small business

     Free tips, information, advice, and ideas, 
     with examples from real small businesses.

     Managing a small business is difficult. The basic problem is you are too close to the actual work being done. In fact, you might well be the only employee.

     You handle sales, production, customer service, ordering materials and supplies, scheduling, and everything else that comes up. Then you turn off the lights and take out the trash.

     The head of a big company has other people to handle all these pieces of the operation. To use an analogy, the head of a corporation is like the conductor of a symphony orchestra. The strings and woodwinds and percussion players play their individual parts, and the conductor puts it all together. 

     Well, that might be you one day. Meantime, your small business is you. You play all the parts.

     To manage your small business so that it grows in an orderly fashion, you must pay attention to planning ahead. Planning turns growth into an orderly process. Planning sets milestones to help you know you're on the right track.

     First, set your long-term goal. This can take some soul-searching on your part. A massage therapist, for example, can set a long-term goal of growing into a wellness center--offering much more than massage therapy.

     Second, set some milestones that, over time, will head your small business toward that long-term goal. This is a matter working backward from the long-term goal to where you are now. Tie your milestones to target dates in the future. A plumber, for example, might set a milestone in the future to add another service van and another employee.

     Third, each milestone will require that you answer certain questions. Will the consumer market you serve support each of your milestones? What effect will technology play? Will you need outside funding or can you grow using only internally-generated funds? Can you use a business partner? Will you need additional space, equipment, employees, or other inputs?

     Fourth, turn all this into hard numbers for each milestone with a projected date. Make certain that projected income from your projected sales efforts more than covers projected expenses. Numbers have a way of turning idle dreams into hard realities. 

     Managing means staying on top of an ever-changing world. Long-term goals and milestones can change as well. Planning ahead helps you sleep at night--after you take out the trash and turn off the lights. 

Voicemail goodbye

     Free daily tips, information, advice, and ideas,
     with examples from real small businesses.

     Statistics show that the days of voicemail are numbered. Recently published numbers reveal that more than three quarters of people do not leave messages when they are sent to voicemail. The simply hang up.

     So why do so many small businesses still depend on voicemail? The answer is simple. Voicemail is convenient for the business--not the caller. And that is bad for business.

     More and more consumers are turning away from voicemail, favoring text messages and emails instead. Consumers know what's convenient for them--even if businesses are slow to catch on. 

     The situation has led to the rise of speech-to-text providers. They turn voice messages into text messages and send them on. Big businesses can afford this extra service, but small businesses are likely to consider it a needless expense.

     All this confirms what I have long suspected. And it comes from my own experience in running businesses. For almost ten years back in the 1990s, I headed the Business Owners Institute in New Jersey. We received a continuing stream of phone calls, and every one of them was answered by a live person--usually before the third ring.

     Nowadays, in active retirement, I write about small business. This means that I speak with many business owners every week. During the last decade, I have been amazed at the number of voicemail prompts I get. Usually, I simply hang up and try again later.

     Prompting a client or customer to go to voicemail simply delays--and sometimes kills--a relationship. Owners of small businesses need to realize that telephones are for the convenience of the customers--not the business. Phones should be answered promptly by a person. If the caller is trying to sell you something, you can simply hang up.

     But if a client/customer is calling to place an order, or make an appointment, it might never happen if your system flips them to voicemail. And you never want to miss that first call from a referral.

     Today, savvy business owners are turning their smart phone into their business phone. You have it with you all the time, and you answer it when it interrupts you. At the very least, have calls from your business phone automatically and seamlessly transferred to your smart phone.

     Technology gallops along at a furious pace. It's hard to keep up with what's available, much less what can be useful or not in your small business. Don't get lost in the glitz and glitter of the latest thing. Keep the focus on the business end of what you're doing.   

     

Expanding your services

     Free daily tips, information, advice, and ideas, 
     with examples from real small businesses. 

     Expanding a business takes careful thought and planning. But sometimes an idea for expansion just comes at you.

     Listen carefully to your clients/customers. They can point you in a new direction, a new future that you might not have considered.

     Example: Guthilda runs a salon and spa. When she took notice that many of her clients were undergoing cancer treatments, she felt badly for them and wanted to help. She decided to add oncology esthetician services. After doing a search, she found an independent certified esthetician and made arrangements to offer the service at the salon. It has worked out well.

     Example: Jonathan runs a landscaping business. He does lots of fall cleanups, winter prunings, spring plantings and year-round mulchings. Many of his customers had questions about shrubs and perennials that Jonathan could not answer. He realized that this might be an area for expanding. He made contact with a Master Gardener and they formed an informal partnership--working together and referring customers to each other. Both benefited. 

     Example: Law school and the bar exam behind her, Annabelle opened her own law office.The first year was filled with traffic tickets, real estate closings, drawing up wills, forming partnerships--and handling worker's comp cases. She suddenly saw a bright future for her law practice if she concentrated on worker's comp cases. The more she dug into the field, the better it looked as a way forward. Today, Annabelle has added a partner and together they devote full time to worker's comp cases. Her firm's reputation is spreading and referrals regularly show up at her door. 

     Be alert to expansion possibilities. New directions for your business pop up on a regular basis. Pick the good ones, test them out, and select the best. Good things can happen to those with eyes to see and the patience to follow through.

     Before heading off into a big expansion, however, always do--or re-do--your business plan. Whether you plan in your head or write out a formal document, it's that projected bottom line that will keep you in focus. 

     More on expansions and business planning can be found scattered throughout these write-ups. In my own businesses, I tended to plan by jotting down ideas on whatever piece of paper happened to be at hand, throwing all these into a drawer, and once every three months or so, go through them. Sometimes, I threw them all away. Other times, I found the nugget that pointed the way forward. In my case, I let the ideas simmer for a while before heading off in another direction.     

Hiring good employees

     Free daily tips, information, advice, and ideas,
     with examples from real small businesses and my experience.

     Finding good employees can be a real problem. Most of the good people already have jobs. You can hire good people away from another employer, but it will cost you.

     To find a good employee for your business, begin by defining what that new person will contribute. New employees must fit into your overall business plan. Ask yourself a couple of questions. Where do you want to go? How can a new employee help get you there?

     Many people who apply for a job don't have basic skills. They don't know how to get to work on time. They don't know how to read and write. They don't know how to answer a telephone. They don't know how to apply themselves to a problem, solve it, and move on to the next one.

     In my own experience, I have placed ads in the Help Wanted section of the newspaper. And then I dreaded the responses. Most of the people who responded didn't know how to clean a toilet. I felt sorry for them, but I sent them on their way.

     Good employees have sparkle in their eyes. They have learned self-discipline. They want to learn new things. They want to be a part of your business. They want to contribute to the success of something bigger than themselves. They want to feel good about what they do.

     Through trial and error, I learned to look beyond the experience the applicant had. I learned that I could teach them the specific tasks I wanted them to do. I learned to look beyond the resume--if fact, if they entered my office and handed me their resume, I simply laid it on the desk and began a conversation.

     My first question was, have you been in the military? If the person had served in the military, I knew that he/she had learned self-discipline and could tackle any task I might have. The applicant had already learned to work in a team effort. The applicant had already learned to respect others. If the person did not have the specific experience that would be useful, no matter. I could teach them everything they needed to know--providing they had the basics.

     Our public schools today are little more than baby-sitting operations. Students are not taught to engage life. Anything goes--there is little if any discipline. Educators are experimenting with the lives of our young people, coddling them, and not preparing them for real life situations they will certainly face later on.

     So, when you look for your next employee, forget the resume. Resumes can be manufactured. Look for fire in the belly and self-discipline. Look for people who can contribute to the team. Look for someone who can eventually replace you.

     At this point, there are more than 150 write-ups in this blog. They cover my lifetime experiences in starting up, operating, managing, growing and expanding businesses of my own. I don't sell anything. I'm just passing on what I've learned in my 78 years.  

Growing with Facebook

     Free daily tips, information, advice, and ideas,
     with examples taken from real small businesses.

     If you are not using Facebook to grow your small business, you are missing a big opportunity. Facebook is easy to use and it's free.

     Promotions on Facebook begin with putting your small business up on the Facebook site. They lead you through it--and it is simplicity itself. Then, start uploading pictures--you're snapping pictures all the time, aren't you?

     Pictures attract attention. They don't have to be professionally done. But they should be interesting--a close-up of a slice of cake if you're a baker, hands massaging shoulders if you're a therapist, flowers blooming if you're a florist or landscaper, a street scene if you're a cafe. Even attorneys can announce free sessions on elder care using Facebook. You get the idea.

     You post a picture on Facebook with a few words and you're done. If you only post once a month, you won't get much return. But if you post two or three times a week, the response can be significant. It depends on the business and how active you are.

     Example: A consignment shop specializes in fashionable women's clothing. A manikin is dressed in every outfit or dress or coat that comes in. A picture goes up on the shop's Facebook page. Handbags are shown with a close-up of the label. Boots and scarves and sweaters and more show up on the Facebook pages every week. The shop attracts widespread attention. Women call and reserve items to be picked up later, or they rush by after their workday. Facebook has helped turn this consignment shop into a fast moving operation. 

     Example: A massage therapist posts pictures of hands working on clients--never showing a face. Pictures of hands massaging shoulders, necks, arms and legs trigger all sorts of responses from people seeing the pictures on Facebook. The response is more calls for more appointments from more people. 

     Example: Retail operations can show pictures of new products, new items being used, along with announcements of sales, discounts, gift certificates, and events set for weekends.
Close-ups of jewelry, potted plants, baked goods, clothing, a deck under construction, and just about any other item can get a response on Facebook. Now and then, take pictures of sections of the inside of your place and post them with a brief comment--this reminds people of who you are and what you can do for them. 

     People in small business need all the publicity they can get--especially when it's free. Take advantage of what Facebook offers. No matter the business you're in, you'll be pleasantly surprised at how well Facebook can promote what you do.

     One last word--I don't have any connection with Facebook other than I'm on Facebook myself. I'm not promoting Facebook for any monetary gain. But it is one of the best promotional tools you can use in small business.