Prevent Past Due Accounts

Anyone that’s in business these days knows all too well how big a problem past due accounts have become.  There has been a monumental increase in delinquent payments since 2008 and most businesses are really not seeing much improvement.

It’s really a tough spot for both business and consumer.  After all, so many of the consumers that are delinquent with payments don’t want to be delinquent – they just don’t have a choice right now.  But the businesses can’t survive if they can’t collect on their accounts receivable – their choice is collect or fold.  Add to that little scenario the fact that it can be incredibly time intensive to try and get those accounts receivable handled… for most small businesses, there just aren’t enough hours in the day to run the business and try to play collection agent.

For many businesses, the solution to past due accounts is outsourcing.  Now I don’t mean collection agencies.  Those guys can be necessary for some, but they should really be a last resort.  The type of outsourcing that I mean is the kind that acts as your accounts receivable department.  They can work with your clients as a third party or as part of your business and help facilitate – and in some cases, automate -  the payment process.  Sound too good to be true?  It’s the real deal!

Are you thinking something like this?

- “It’s  probably expensive”

- “That kind of thing won’t work for my business”

- “My customers won’t like this kind of system”

The beautiful thing about A/R outsourcing (again, NOT collections) is that 1) it is not expensive, 2) it can work for any business or medical/healthcare practice that invoices their customers or that carries high-balance accounts, and 3) most customers will actually appreciate the fact that you are taking a thoughtful approach to their situation and not throwing them to the collection agency wolves.

At a time when it is tougher than ever for small businesses to survive, don’t overlook potential solutions just because you think you know what the outcome will be.  Sometimes the simplest approach can be the best.  Imagine a solution that cost you less than a utility bill but could reduce your delinquent accounts to less than 10%.  Wouldn’t that be worth considering?  If it would, visit our website at www.bettercashflownow.com, give us a call or send us an email.  That’s the solution that we offer every day.

Executives should go experience their business from the bottom up

I have a bit of a confession to make… I am NOT a fan of reality TV.

Shocking, I know.  But my take on the whole reality TV thing is this: the two reasons that reality TV is proliferating are  1) because people’s lives are so unfulfilled that they love to see people worse off than themselves and  2) there is almost no creativity, imagination or talent left in Hollywood.

That latter point can be readily seen in the fact that so many old TV programs and movies are being remade.  While some of the remakes are decent enough, the fact that they were remade at all just screams to me that the Hollywood writers have run out of ideas and think no one will remember the originals and, if they do, they’re too old to matter to the demographics anyway.

But I digress.

Despite my dislike for the reality genre, I had heard enough ads for the program “Undercover Boss” that I was intrigued.  I thought it might be interesting to see some high-level execs get put in their places by the everyday Joes and Josephines in their companies.

My interest in this concept comes from my frustration.  After all, anyone following the whole economic collapse, govt. bailout idiocy, and growth of Big Brother over the last several months can’t help but want to run screaming into the streets over the continued hand-outs of bonuses in the large corporations and on Wall Street.  This is the root of my own frustration.  But you may ask, what has one got to do with the other?

It is my belief that one reason so many large companies and corporations and yes, dare I say it, POLITICIANS, have screwed up so monumentally yet continue to get bonuses despite their big, giant F*** Ups is that these individuals are ridiculously out of touch.  They’ve been in the ivory and glass towers for too long and don’t know what real life is all about.  THEY should have to go to the bottom position and work in the trenches and see just how much their out-of-touch decisions impact the worker bees.

So now you see the reason that I wanted to watch this “Undercover Boss” program.  And yes, I do realize that I fell right into the same mental position that leads the rest of the world to watch these types of programs.

Anyhoo, it was a truly inspiring program.  The president and COO of Waste Management, Larry O’Donnell, went undercover and worked several blue-collar jobs within the company.  He actually realized how the policies that he himself implemented worked for and against the company and its workers.  The experiences also helped motivate him to change a number of policies for the good of the everybody.  Ovation please!

I can’t tell you how refreshing it was to see this really successful guy take on the less-than-glamorous jobs within his company, get handed a lesson or two, and come out the other side a wiser man for the experience.  Could it have been a really good snow job?  Sure.  It is TV after all.  But I prefer to think that it was pretty genuine.

So now that I’ve seen this program, I’m thinking that all of those career politicians, Wall Street/Financial Industry mucky-mucks, and corporate execs that received govt. bailout money for their corporations should be yanked – kicking and screaming if necessary – out of their big, cushy office chairs and forced to worked along the ranks of the company underlings and everyday people to get a refresher course on real life and humanity.

The lessons they learn could change the course of the world as we know it.  The real question is, do any of them have courage enough to do it?  And sadly, I think that we all know the answer to that one is a big, fat ‘No’.

Guess what they found (you’ll probably guess)… they found that the balance board was indeed very well made and that it was sensitive enough to use in place of a the standard medical device that doctors use to assess a patient’s balance.

This is a huge discovery!

Since the Wii was initially released, we have all heard story after story of the gaming console finding its way into unusual places such as nursing homes, assisted living facilities and physical therapy clinics.  This new look at the Wii balance board by doctors at a teaching hospital will undoubtedly open a multitude of new possibilities for its use.

I love this story for so many different reasons.  It always makes me smile to think of nursing home residents playing Wii games.  For so many of these people, daily life is less that rosy.  But then they may find themselves bowling or playing tennis or ping pong and feeling a little exhilaration!

Beyond that type of story, I really love the fact that this somewhat unassuming (albeit wonderfully technical) “toy” is finding so many uses in medical environments.  With the raging healthcare debate, it’s hard to ignore the rising costs of medical care.  When a diagnostic tool costs tens of thousands of dollars it quickly becomes out of reach for many medical facilities.  It doesn’t matter how necessary that diagnostic tool is, if the funds aren’t there then the tool won’t be either.

To me, this is a wonderful modern business version of David vs Goliath.

A little upstart bucked the status-quo.  They decided to look in a different direction and explore the possibilities.  As a result, they have charted a whole new world of gaming technology and it is paying off big!  Businesses everywhere should be paying attention to all of this and take a chapter from the book of Nintendo.  The marketing lessons here are tremendous!!

While Nintendo has been around for a long time, they’ve held a small market share in recent years when compared to Sony Playstation and Microsoft Xbox.  Despite that, Nintendo has always had a very loyal following much like Apple with the iphones, ipods and macs.  Still, when the Wii was released there were audible “ooh”s and “ah”s from every direction.  Not only did the loyal Nintendo players snatch it up but so did the rest of the gamers out there who were starving for something new, different, and VERY exciting.

All of that was to be expected.

The evolution of this little video game platform into a therapeutic tool is what has excited me the most, not only because of the current uses for the game but also for the myriad possibilities for future uses.

I love video games and, yes, Nintendo is my platform of choice.  I also happen to know more than a few ‘boomers that enjoy playing.  It thrills me that the Nintendo platform, the market underdog for so long, has emerged as the new market leader in innovation.  The other platforms are working frantically to catch up and the bar has been set high.  Technology has laid so many possibilities at our feet, it will be incredibly interesting to see what those guys create next.

But gamers aside, the real winners here are the medical patients that are finding new and effective therapies coming from a very unexpected source.  And with the price on the Wii and its accessories being so economical, especially when compared to other medical alternatives, it is thrilling to see it being so readily incorporated into therapy programs.  This means more accessibility to people that really need that help that it can offer.  How incredible is that?!

I applaud Nintendo and I give a standing ovation to those in the medical and allied health fields that are quickly incorporating this wonderful “toy” into their therapy programs and taking advantage of the benefits that can be derived from its use.

Well done, or should I say ‘game on‘!

How Realistic is Your 2010 Cash Flow Strategy?

Ok, so we are getting 2010 well underway.  That holiday rush is over and we’re all beginning to recover from the madness.  But with 2010 moving full-steam ahead, what are strategies are you planning to improve your profits?

It’s certainly no surprise that last year created some pretty intense challenges for businesses everywhere, especially small businesses.  Many were caught off-guard and unprepared and closed their doors as a result.

Do you remember hearing that warning when you got into business about how most new businesses fail?  And why do they fail?  Lack of capital.

In other words, they didn’t have a good cash flow strategy and they didn’t have a good back-up plan in place for those dark days that every business must face sooner or later.  It is vital to have a financial cushion to help your business and it can come in handy during any number of situations: decreased revenue, increased costs, vital expansion, unforeseen expenses, etc.

But we’ve all heard this time and again, right?  Now it’s time to take that lesson and apply it to the new year and to a new, or updated, business plan.

A couple of easy places to start that can bring INSTANT results are:  1) decreasing costs  and  2) increasing collections (did you think I was going to say sales?).

But wait… all of the business gurus usually say to increase sales, not collections!!

That’s right.  But increasing sales can vary dramatically depending on the type of business that you have.  It could mean adding new products, new personnel, or starting a new ad campaign.  A new marketing plan could cost one business $200 and cost the business down the street $25,000.  And marketing takes time and thought.  I’m talking about things that can help you see results TOMORROW.

Now is the time to sit down and go over all of your existing costs.  I have yet to see a business that couldn’t tighten things up and see some good savings after really giving those expenses a thorough examination.  Some lines aren’t selling well if at all – cut them back, put them on sale, or eliminate them entirely.  Some distributors can provide the same items for less – weigh the pros and cons there and use the one that gives you a better profit margin.

Be creative.  You can find cost savings all over the place if you look.

What about increasing collections?

It is often shocking to hear how badly some businesses struggle in this area.  You don’t want to lose your customers, but you are having a hard time collecting on their accounts.  It is possible to have a win-win situation here.  Really… it is!

Despite what we’ve all been reading and hearing, sending accounts to collections is not the best answer.  You know that you’ll lose that customer, you’ll lose the future income from that customer, and you will get pennies on the dollar for what they owe.  Yes, the collections approach may become necessary at some point, but let’s try a different approach first.

Ever heard the term ‘payment plan’?  Of course you have.  You’ve probably set one up yourself at some point.  This is the key to increasing your collections while keeping your customers.  For the customer or client, you are showing that you understand the difficulties they face and that you want to go the extra mile for them.  For you, that customer or client is going to appreciate your understanding and will be RELIEVED at this payment option.  You’ll also probably see a lot of referral business as a result.

This type of approach can work for almost any business.  One of our clients was carrying accounts and having trouble collecting on 40% of those accounts.  After discussing a payment plan approach, he basically quit carrying accounts.  Payment is now expected upon order completion (handcrafted furniture).  For those few accounts that can’t pay the balance all at once, he now gets 50% up front on custom orders to cover his costs and allows paying the rest over time.  Terms are set on an individual account basis.  His A/R collections are now around 95-96%.  Not too shabby.  Even better… no one complained when he stopped invoicing.

It’s a new year.  It’s time for a new look at the way that your business is performing.  Do yourself a favor and take the time to really go over the books and see what’s happening with your bottom line.  Make a few changes here and there to make sure that you will continue to see a healthy profit in the months and years to come.  A little extra time spent now could save your some major headaches in the future.

The answer is simple… consumers are in a unique, “buying” frame of mind!

“But I need more than just holiday sales!”

And you can get them – IF you know how to take advantage of this unique buying attitude.

While a lot of businesses will look at holiday shoppers and see a 6-week window of sales opportunities, a savvy marketing mind will realize that you can set up special buying opportunities for holiday shoppers that will generate revenue for you throughout next year.

How?

Have you ever heard of the Book of the Month Club?

What a simple idea and it produced a business empire.  By selling an inexpensive membership, the BMC generated year-round revenue.  Members see value and convenience in both the cost and in the fact that their books are shipped directly to them.

How does this help you?

Is your mind already trying to think of a way to start a something-of-the-month club?  It should be!

Almost any business can come up with something to offer on a monthly basis.  There are all kinds of things-of-the-month:  music of the month, flowers of the month, wine of the month, fruit of the month, movie of the month, beer of the month, cookie of the month, coin of the month, etc., etc.

While all of these examples are physical products, services can easily be offered.  For instance, a car dealer could offer a car-wash-of-the-month for people who purchase a vehicle from them.  An air conditioner repair service could offer monthly filter replacements.

If you can’t think of a way to use the thing-of-the-month idea with your service business, you can use the idea with products related to your business.  Boat dealers could offer a boat-related gadget of the month.  Hair stylists could offer a hair product of the month (you could utilize product samples for this).

The idea behind this is that you offer the bundled product/service at a strong discount for the long-term purchase commitment.  This will create customer loyalty and keep those customers coming through the door.

And guess what… when they come through the door to get that monthly item, you get another opportunity to sell them on some other product or service that you have.

This is a marketing strategy that can pay off in huge ways!

Holiday buying will continue into January.  It’s not too late to put this marketing plan into action.  Buyers are looking for unique gifts and bargains.  Get your thing-of-the-month offer in front of them and feel the benefits throughout next year.

We talked about being courteous to your customers (or patients), even if they are a bit “trying”.  Being nice is free and it works wonders when it comes to customer loyalty AND to word-of-mouth referrals.

Another key to customer loyalty is follow-up.  By following up with them, you are letting them know that you appreciate their business, and we all like to feel appreciated.

What are you currently doing in the way of customer follow-up?  Where do you begin?You may have that person’s name and even their phone number, but do you have any other information about them?

You need to consider some type of information gathering campaign.  But let’s be clear… in a time when identity theft is everywhere, we have to be VERY careful about the types of information that we collect and what we do with that info.  So, with that word of warning, we’ll move on.

Drawings are a tremendous way to positively influence your cash flow.  With the sign-up for the drawing, you are collecting valuable customer information.  Those customers will tell their friends who will also want a chance to win.  You’ll get increased foot traffic that will most likely spend some time looking and possibly buying from you too.  Now is a fantastic time to start this type of info collection campaign.  You’ve got both the holiday season and the economy working in your favor for this.

A few key points to running a successful drawing:  1) the prize needs to be something good, not something you’re trying to get rid of  2) have your sign-up slip look decent, not like the work of a kindergartner  3) assure consumers that their information is safe and treat it like gold (because it is!!).

Do you have to buy some big super prize?  No, you don’t.  If yours is a service business, the prize could be use of one of you most valued services free for a year, 6 months, or whatever time frame you like.  Or, you could offer one of your premier services at a reduced rate.  Likewise, if you offer products, you could offer one of your really nice seasonal items as the prize.

What info do you collect and what do you do with that info?  The most vital information is name and address.  If you can get their email address and their birthday, even better.  For a basic follow-up campaign, you can send that person seasonal cards.  If you know their birthday, send them a birthday card.  If you get their email address, you can notify them of specials, tell them about new inventory, send them coupons, give *special discounts for customers on your email list.

See how easy this can be?

Your follow-up program does not have to be costly or difficult.  It can be as easy as sending a birthday card and an occasional email.  The point is that you are staying in touch with them and giving them attention that random customers don’t get.  You appreciate their patronage and you are telling them, and showing them, that you do.  It won’t go unnoticed and your cash flow will appreciate the effort.

Risk:

“It is not because things are difficult that we do not dare, it is because we do not dare that they are difficult.” -Marcus Annaeus Seneca

We all know that life is tough these days.  Everything seems to be a challenge.  Some things are such challenges that we just don’t think they’re worth the effort.  After all, the outcome probably won’t be that great, right?

What a mind-set!  And we all do that.  We stop ourselves before we even get started.

The reality of this is that we’re not doing anything but limiting our own lives.  We actually make things more difficult for ourselves by staying in our same tired routines. It’s just so easy to stay put.  But if we really want something, whatever that something is, and I mean REALLY want it, isn’t it worth the risk?

Wouldn’t you rather have even the possibility of success by risking rather than the certainty of failure from not even trying?

It’s Ok.  Go ahead, try.  Take that leap.  Take little baby leaps if you need to move gradually.  But move.  As long as you’re moving, you’re making progress.  At the very least, you’ll get a nice change of scenery.  And who knows… you just might succeed!

“How do I keep my customers coming through the door?“

Our clients are asking us this question on a regular basis these days.  It’s a worry that is affecting a really large percentage of businesses, regardless of their size.  Unfortunately, it’s a justified fear too.  Too many businesses have closed because they just couldn’t keep traffic coming through the doors.  But you already have a customer base, otherwise it’s unlikely that you would still be open.  Those current customers are the key to riding out these challenging times!

So now, let’s think about this from a different perspective.

What are you doing for your customers?

That may seem like a straight-forward question, but it’s much more complex than you would think.  If you’ve ever had a sales course, you know that you are “solving their problem” whatever that problem may be as it applies to your business.  If you are a gym, you are solving their health or fitness problem, if you are home decor business you are solving their problem with creating a certain home presentation.  There are “problems” of all types and businesses of all types that provide solutions to those “problems”.

Easy enough.  But like as not, there are other businesses in your area that are trying to solve the same problems that YOU are trying to solve.  So, why is that customer going to spend that dollar in YOUR store instead of one of those other stores?

Ready for the secret?

The secret to instant customer retention is as simple as… Good Customer Service!

Did you guess the answer?  Most business owners don’t.  How is it that something that is so simple, so easy, and is ABSOLUTELY FREE is overlooked by most businesses these days?

One of the easiest ways to make your customer service better is by simply being nice!

This isn’t rocket science folks.  Unfortunately, common courtesy seems to have gone the way of the Dodo.  People are more worried about themselves and their personal daily struggles – and yes, life is difficult.  But THIS is really easy… it’s as easy as saying a ‘Hello’ to someone.

Do you and/or your employees say ‘Hello’ to each and every one of your customers?

Businesses no longer treat their customers like the golden geese that they are.  Those customers that are being ignored are the ones that can keep your business profitable when the businesses are folding up their tents and going home… permanently!

Your new customer appreciation program should start NOW.  Greet every person that comes into your business, and greet them nicely.  Have all of your employees do the same.  It doesn’t matter if you are having a bad day, they might be too.  And think of the impact that such a simple gesture could have.  If you treat someone nicely when they are not expecting it (i.e. when they’re having a bad day), you will most definitely have a powerful, positive impact on them.

“But my customers ask stupid questions”.  So?  You should answer every single stupid question that they can throw at you and answer it NICELY. Answer them like that is the only time that you have ever heard that question.  Is it a pain in your (or your employees’) back-side?  Of course it is.  But you are in business and this is how you show your customers that you appreciate them bringing their dollars to you.

And don’t underestimate the impact that this type of attitude can have.  Think of your own recent experiences as a consumer.  Were the employees at those businesses nice to you, helpful to you, patient with you?  Probably not, or maybe partially.

Create a pleasant, courteous experience for your customers and they will remember it, they will appreciate it, AND they will TALK about it to their friends and family.  That customer will keep coming back to you and you will be building referral business through FREE word-of-mouth marketing!!

Easy.  Simple.  FREE!

We are small business consultants.  Our goal is, was, and has always been to help small businesses by giving them honest, up-front information that can help them improve their profits.  We accomplish this through our unique cash flow services as well as through relevant information related to running your business including online business, marketing, customer retention, workflow efficiency and even equipment financing.

Our clients are like friends and family to us and each is treated as the unique person that they are with their own unique business needs.  But we think that we have a lot of valuable information that can be helpful to those businesses out there that are not our clients… yet!

We hope that you find some worthwhile information here and that you’ll come back often.  We also hope that may consider joining our client family soon.  Thanks and enjoy.