Collecting Money

30 November 2010 Categories: Gerry's Corner

           Over the years I have worked with many small Businesses/Entrepreneurs. Today I want to talk about the Homepreneur, the Home Based Business, the personal service Business, the people who work alone contracting out their services. These services can include various forms of Consulting, accounting services, Electricians, Plumbers, IT services and the likes. Retail ( selling a product/products ) is not included in this piece. Usually these type of people are very good at what they do and do not like to work for an employer usually because of the freedom that self-employment offers them. In a start-up Business these same people usually struggle with Marketing their Business and maintaining accounting records. At a later date I will address these 2 areas. However today I want to concentrate on another Achilles heel these Entrepreneurs have. Believe it or not they have a problem collecting the money that is due to them for services rendered. Some feel like they are begging for their money. Some feel that they are bothering the client. Some are just embarrassed to call to say you owe me and I need to collect. If a person cannot collect what is owing to them after delivering a service then they should stay away from being a Business owner because this is a ticket to Bankruptcy. It amazes me why would you not make sure your money is collected in a timely fashion.

        I have been asked to help individuals who say they are not making money. One of the main reasons is they work and work then devote no time to calling their clients to collect on their services. They are actually working for free. In one case I worked with an individual who had receivables in arrears for 6 months. He should have been paid on a weekly basis let alone months later. Of course he was not making money he had in excess of $ 60,000.00 owing to him and he kept working for these same clients. In some cases they had lost his invoices. In other cases the client was delaying as long as he could because he was able to use this money for other aspects of his business. This is a common tactic for certain businesses; pay your invoices very slow and collect your receivables fast. Good business strategy if you apply it to yourself but bad if your client uses it on you.

       Here are some simple rules. When negotiating a contract, discuss the terms of getting your invoices paid and hold them to it, NO excuses. Stop the work you are doing till they pay you on time. Technically if you are not paid the client is in breach of contract. They usually don’t like that. Never get too busy to collect your money. Collecting on your invoices is a weekly activity not monthly or when you get to it. Nobody wants to work for free so why should you.

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29 November 2010 Categories: Gerry's Corner

         There are many good employers around us, unfortunately the better employers are very large employers i.e. Conglomerates, Internationals. These companies have deep pockets and have a lot invested in their employees. The reality is the majority of employees work for much smaller organizations therefore sometimes they are neglected or ignored. Here is a hypothetical story that is way too common.

      An employee has been with a company for 10 years. During that time they have grown with the company by learning its’ operations and culture. In doing so they got to know the managers and owners along with their likes and dislikes. Along with growing with the company they become more proficient with their duties hence more duties are added on. In other words, the initial written job description is a page long after 10 years it is 4 pages long. Yes, they did get minor salary increases over the years but the truth is if the job was properly evaluated, the job now is probably underpaid. The employee gets discouraged not getting paid what they are worth therefore decides to resign hopefully with another job in hand. The phenomenon that takes place now is one of the following. The employer puts someone else in the job and finds the new employee cannot do the job as efficiently so adds another employee to help. Or the employer goes outside the organization and hires someone new but finds they have to pay a lot more money for them. Sometimes when a resignation is received, the employer decides to make a counter offer or negotiate a new salary ( give a salary increase ) with the employee resigning. In my personal opinion, this is admittance on the part of the employer of not taking care of the employee in the first place. Sometimes the employer will try to lure the x-employee back with the promise of more money. The employer makes a big mistake by assuming the employee will never leave because of their long tenure, bonus plans, kids in school, work location, etc. The employer tries to save a few dollars in the short term but lands up paying big dollars in the long term.

         My advice to employers is don’t ever neglect your employees for the sake of a few dollars, it will always cost you more later plus you will never gain the employee’s total trust again because you have admitted to taking advantage of them and they will expect you to do the same in the future. My advice to employees is never return to your former employer because history will repeat itself. Even if you get a big raise after resigning and decide to stay, you should now start looking for another job because now you know what you are actually worth.

      I have seen this scenario too many times and there are no winners. The employer loses on their investment in people and even if this is one employee the other employees see what you have done. This is real bad for employer/employee relations. As an employee you will gain in the short term but you will be haunted wondering if you are maybe worth more and if the employer will take advantage of you again. As my final note, this little story repeats itself over time and is not sensitive to good or bad Economic times.

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Parking Lots

26 November 2010 Categories: Gerry's Corner

       Here is a story that some of you can relate to. Recently I went to my Doctor’s office to pick up some forms. Her office is in a Medical building that has monitored parking. The rule is, if you are parked less than 15 minutes it is free. Also you must get your ticket stamped by the Doctor’s office to get a discount of $ 2.00 on your ticket otherwise the parking fee goes up to $ 6.00. I parked and went to her office fully expecting to be there for more than 15 minutes. To my surprise my wait was minimal, received my forms and I left. I decided to take the stairs down instead of the elevator, in doing so I noticed that I was there less than 15 minutes. Great free parking today. I get into my truck and start to leave the parking lot towards the kiosk to show my ticket. Of course I am vehicle # 4 to get to the kiosk. I pull up to the attendant with a smile on my face because I was under the 15 minutes. I am waiting for the gate to open and she says $ 4.00 Sir. I said I was here less than 15 minutes. She starts to advise me that I was actually there for 17 minutes. But I said I was in line for at least 2 minutes to get to the kiosk. Sir she said again, that is not my fault, you have been here for 17 minutes so you owe $ 4.00. I said come on, this is close enogh especially considering there were 3 vehicles ahead of me to get to you. Sorry Sir, please pay or I’ll alert Security. Well I think this is totally unfair. Sorry Sir those are the rules. Under protest I paid the $ 4.00.

         The moral of this story is once again computers rule. The ticket clocked 17 minutes, you must pay. Unfortunaley Human intervention is not allowed. Common sense and customer relations do not apply in Parking lots. Next time, I’ll park longer just to make sure I get my money’s worth.

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Business Plans

21 November 2010 Categories: Gerry's Corner

   Recently I was asked for advice on completing a Business Plan for a new Business. I thought I’d share my answer in part with you. First of all developing a Business Plan is the most hated exercise next to an employment resume the difference being the resume records historical data rather than predicting the history yet to happen. That is the difficult part, to predict the future with so many variables. The importance of this necessary document is a working road map for yourself and a selling tool to be used when trying to attract investors to buy into your idea. The best advice I can give is you need 3 versions of your Business Plan. Wait, don’t panic, hear me out first. The 1st version is the worst case scenario. This Buisness Plan will list minimal revenue and maximum expenses. My Philosophy is, it will always take longer than expected and it will also cost more than you had planned. The 2nd version is best case scenario. This Plan has more Revenue than initially expected and expenses are as low as possible. The 3rd plan is the reality version. It is usually just above the worst case scenario. This becomes your real working document. If you exceed your revenue forecast then you are laughing all the way to the bank. If your expenses exceed your forecast then you need to make some quick adjustments and not let your numbers get worst than your worst case scenario. Otherwise you may have no choice but to close or stop the Business to re-strategize,

     Bottom line is the more planning you do up front, you reduce your chances of failing and disappointing yourself and more importantly losing your investments.

     Over the years I have helped many Business startups and today I coach Small Businesses ( 5 years plus ) that need assistance to fine tune their existing Business or want to grow it to the next level. A little personal secret, I have just started my 28th year of Self-Employment. I have worked more years on my own than having worked for the MAN. That is my personal claim to fame.

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Tone of Voice

12 November 2010 Categories: Gerry's Corner

        Here is another complaint or observation on today’s Technology. I truly believe that we are losing something very valuable and important in communications by relying more and more on Electronics. Text messaging and the likes is not the same as talking to the person. You lose the most important element which is the tone of voice. Even voicemail does not do justice compared to the real person. You say a phrase 10 times in various tones and you can convey 10 different meanings. Take the important phrase   “ I love you “ One tone could convey words only yet with another tone give a warm feeling to the person we are saying it to. Electronics have not evolved to that degree. Reading a sentence or message does not give you the real meaning of the message or the opportunity to ask for clarification. In relationships this could mean the difference between strengthening a relationship or breaking up. The communications between child/adolescent and parent and vice versa is critical to get it right the first time.

        In Business this could mean the difference between getting a sale orlosing sale. Here is a case in point. I have been looking for an item that is difficult to find. I wanted to find it locally so I could see it before buying. An Internet purchase was out of the question. I very seldom buy on the Internet anyway. I started calling certain specialty stores to find out if they carried this particular item. I called this one store and was lucky enough to have the owner answer the phone. I asked about the item and she genuinely felt bad that she did not have this product or related products. She proceeded to ask me if I tried this store and other stores. Her tone of voice was conveying a deep concern that she disappointed a customer or potential customer. I thanked her and she wished me not only to have a good day but also success with my search to find this item. I got off the phone with her, paused and thought about our conversation then said to myself   “ She was so genuine, polite and accommodating I feel great about this conversation. I think, I will visit her store, thank her in person and see what is in her store.” Had she been rushed, rude or just have a colder tone of voice then I would never visit her store.

        Years ago some companies trained people for face to face service like Banks or for telephone service and support. Their training in part was to skill practice while looking in a mirror. The concept was relatively simple: Would you buy from this person in the mirror? Would you want to talk to this person who is not smiling in the mirror? “

      In Business and personal life take the time to talk to people and mind your tone of voice rather than electronically communicate, it will always serve you better. No one minds talking to a happy voice. No one can get mad at a happy voice. Use your happy voice and have yourself a great day.

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