In my business we have a rule. The rule goes something along the lines of: We do the work we get paid for doing the work. That’s it – no exceptions, no arguments. If on the rare occasion, someone isn’t happy with the work we do, we’ll look at this and go out of our way to sort it out, but this isn’t (in my book) an excuse not to pay.
This policy has worked really well for me – we’ve only had one problem payer in the last 5 ½ years. All of our clients are up to date on payments and it’s very rare now that we have a late payer.
So, I thought in this article I’d share with you some of the things that we do and hopefully it will help you as well. Here are my top ten tips:
1. Send your invoices out on time.
I was having a chat with a client the other day who said he’d ordered some business cards about 18 months ago and he’d only just received the invoice for them. Good grief! Rule number one in my book is to send your invoices out on time. My invoices always go out on the 1st week of every month no matter how busy we are and then clients have 14 days to pay them. Come on guys, make sure you have it in your diary to send these invoices out as soon as you’ve completed the work.
2. Make your payment terms very clear
Our rule that I told you about at the beginning of this article is made very clear to all of our clients before we start working with them. They all know that we hate bad payers and that we will refuse to work with them if they are. Making sure everyone knows when they will be sent an invoice, when they are expected to pay it and what happens if they don’t is the key to making sure you get paid on time, everytime. If people are not clear on what’s expected of them, are you surprised that they don’t do what you want them to do?
3. Ask for deposits
A good policy to get into the habit of doing is to ask for a deposit upfront before any work has even started. It’s quite usual these days to request this and can prevent a lot of problems later down the line. At least then, if they don’t pay any further money, you’ve been paid for the work you’ve already done. Deposits of anything up to 50% are fine – try it and see if it works for your business.
4. Set up Standing Orders
Another great way to make sure that you get paid when you’re supposed to is to set up a Standing Order. Psychologically in the customer’s mind, they’ll have already committed to paying you every month then and it’s highly likely then that you will actually get paid. To create a standing order, simply ask for a form from your bank and then type it up on your PC so that you can email it or send it out to your customers.
5. Lead by example
There’s no point hassling other people to pay your invoices unless you lead by example and pay yours. This means that you give out a strong message that you pay your bills on time and that you expect people to do the same for you.
6. Have a policy in place if people don’t pay
It is well worth having a process in place that you can follow if people don’t pay you i.e. that you’ll call them, then send them a letter, then send them a sterner letter and then finally threaten and take them to the small claims court. Having this set down in your terms and conditions make your clients aware of the penalties of not paying.
7. Chase, chase and chase again
If someone owes you money, all the rules about hassling people go out of the window. Chase, chase and keep chasing – every single day if necessary until you get the result you want. I once worked with a client who owed lots of money to different people. He told me that he paid those people who shouted the loudest and ignored those who were quiet. So hassle away.
8. Use text messaging
This is by far one of the most effective techniques we have to get money out of people. Phone calls can be left to go onto answering machines; emails and letters can be ignored, but for some reason everyone looks at their texts. If you’re finding it hard to get in contact with some, try texting them and see what happens.
9. Use someone else
If you don’t feel comfortable chasing people for money, get someone else (like a book-keeper or credit controller) to do it for you. And if you’re really stuck, get a friend or a partner to do it for you. With difficult payers, often just hearing someone else’s voice can do the trick. Also, if they’re not answering your phone call because they know the number, try calling from someone else’s mobile.
10. Come down on them hard
If you’re dealing with problem payers, make sure you follow through on your policy for non-payers and come down on them like a ton of bricks. Not paying you is never acceptable, so don’t put up with it.
While it’s hard dealing with someone who owes you money, being very clear about what your expectations are is the first step and then making sure you follow through on your actions if they don’t pay. Try it today and don’t put up with bad payers.
Exceptional Thinking (http://www.exceptionalthinking.co.uk/) provides help and advice to small business owners and start-ups on marketing, market research and business planning.
Saturday, 17 May 2008
Tuesday, 13 May 2008
Should you raise your prices?
There are a lot of small business owners out there who really put off raising their prices. They will argue that they need to remain competitive or that their customers wouldn't use their services if they raised their prices and a whole host of other excuses.
But I want to put a point across to you about what's been happening out there recently. Don't know whether you've noticed, but fuel, food and energy prices have gone through the roof recently and show no signs of abating. These 'bigger' companies have no issues about raising their prices even if it means their customers suffer or their public image is badly affected. They're simply increasing their prices because they don't want their profits to fall. Nice attitude eh?
Now I'm not suggesting for one second that you should act like these companies in the way you behave towards your customers and certainly not that you should raise your prices just for the sake of it, but I do want to make a point.
If the cost of living has gone through the roof, are you being fair on yourself if you're charging the same prices as a year ago (or in some cases much much longer than that)? You should be reviewing your prices on a yearly basis and nothing is more true than at the moment.
Bite the bullet and look to raise all your prices by 10% - at least. For existing customers just notify them that as of x date, your prices will increase and stick to this. And don't worry too much if they say they don't want to work with you any more. If they leave you simply because you're reasonably raising your prices, chances are that they won't be the customers you want to work with anyway.
But I want to put a point across to you about what's been happening out there recently. Don't know whether you've noticed, but fuel, food and energy prices have gone through the roof recently and show no signs of abating. These 'bigger' companies have no issues about raising their prices even if it means their customers suffer or their public image is badly affected. They're simply increasing their prices because they don't want their profits to fall. Nice attitude eh?
Now I'm not suggesting for one second that you should act like these companies in the way you behave towards your customers and certainly not that you should raise your prices just for the sake of it, but I do want to make a point.
If the cost of living has gone through the roof, are you being fair on yourself if you're charging the same prices as a year ago (or in some cases much much longer than that)? You should be reviewing your prices on a yearly basis and nothing is more true than at the moment.
Bite the bullet and look to raise all your prices by 10% - at least. For existing customers just notify them that as of x date, your prices will increase and stick to this. And don't worry too much if they say they don't want to work with you any more. If they leave you simply because you're reasonably raising your prices, chances are that they won't be the customers you want to work with anyway.
Wednesday, 7 May 2008
Track your marketing
Whenever you do some marketing, you should always find a way to track it if you can so that you know whether or not it's working for you. There are a couple of ways you can do this - try using a code that people have to tell you to order their products or services; use a voucher that they have to hand in to you; use different colours for things (i.e. if you're sending out leaflets try putting one set of words on orange paper and then different wording on blue paper); or try the old fashioned tried and tested method of asking people.
Whatever you decide to do, tracking your marketing is crucial so you can see whether it's working for you or not - that way you'll know a) where to market your products and services in the future and b) if you are going to spend money, you'll know what's likely to give you the highest return on investment.
Why not try tracking your marketing and see if it works for you?
Whatever you decide to do, tracking your marketing is crucial so you can see whether it's working for you or not - that way you'll know a) where to market your products and services in the future and b) if you are going to spend money, you'll know what's likely to give you the highest return on investment.
Why not try tracking your marketing and see if it works for you?
Wednesday, 30 April 2008
Pre-qualifing people
I was asked a question this week about sales. "Is it just a numbers game?" my client asked. "If I sit down and talk to more people about my business, surely I'll get more business..."
My response was "Well, it's not quite a simple as that."
About 2 1/2 years ago, I had this same thought for my business, resulting in a really hard drive by me to get two potential clients a week that I could sit down with. And I did it! I was really proud of myself - that is, until I look at the number who were turning into clients and realised that it was only about 2 out of every 10 people I was seeing.
In other words, it really didn't matter how many people I was seeing on a weekly basis because the number actually buying from me was so low. So, I realised that there must be something actually wrong with my sales process.
After analysing and reviewing my sales in depth, what became clear was that the people I was seeing were not really interested in buying from me. They wanted some quick tips, or they wanted referrals, but they didn't actually want to buy my services. I needed to weed out this type of person - not that I didn't want to speak to them, but I needed to find some way of not spending at least an hour and a half of my time with them.
What I started to do was put in place a phone call before I met the person. This served a number of purposes - firstly, it allowed me to start building a relationship with that person. Next, it helped me to understand what they wanted and if it was a quick tip, I was able to give them that over the phone and finally, it helped me to pre-qualify that person, so that the people I actually sat down with for an hour and a half were serious about buying my services.
By pre-qualifying people I now see at least one person a week but I'm turning around 8 of the people I see into customers. I'm happy with that ratio!
So today's tip - don't worry about how many you see - increase the number of people you turn into customers!
My response was "Well, it's not quite a simple as that."
About 2 1/2 years ago, I had this same thought for my business, resulting in a really hard drive by me to get two potential clients a week that I could sit down with. And I did it! I was really proud of myself - that is, until I look at the number who were turning into clients and realised that it was only about 2 out of every 10 people I was seeing.
In other words, it really didn't matter how many people I was seeing on a weekly basis because the number actually buying from me was so low. So, I realised that there must be something actually wrong with my sales process.
After analysing and reviewing my sales in depth, what became clear was that the people I was seeing were not really interested in buying from me. They wanted some quick tips, or they wanted referrals, but they didn't actually want to buy my services. I needed to weed out this type of person - not that I didn't want to speak to them, but I needed to find some way of not spending at least an hour and a half of my time with them.
What I started to do was put in place a phone call before I met the person. This served a number of purposes - firstly, it allowed me to start building a relationship with that person. Next, it helped me to understand what they wanted and if it was a quick tip, I was able to give them that over the phone and finally, it helped me to pre-qualify that person, so that the people I actually sat down with for an hour and a half were serious about buying my services.
By pre-qualifying people I now see at least one person a week but I'm turning around 8 of the people I see into customers. I'm happy with that ratio!
So today's tip - don't worry about how many you see - increase the number of people you turn into customers!
Tuesday, 22 April 2008
How often is too often?
Talking about following up via phone last week, I had a chat with a contact of mine yesterday about following up by email and sending out email flyers and newsletters. He was asking the question of how often is too often?
Good question - and a difficult one to answer. Generally, I tend to think that if people are interested in what you're offering, they'll continue to subscribe to what you're sending out if they think it is of use either now or in the future.
If they're generally not interested, then they'll either just delete it or unsubscribe from your emails and that's fine too - surely you'd rather communicate with people who are genuinely interested in what you do?
People who I send out emails too generally get send a combination of three things: a newsletter, a monthly tips sheet and if they're based in Gloucestershire, Bristol or Birmingham some information about the workshops that we run. Depending on how I met them or what they've asked to subscribe to, they may get one of these emails or all three.
If you feel that you'd like to receive more tips or valuable information from us that you're not currently getting (i.e. if you're receiving information about the events, but would also like to get the newsletter or monthly tips) just let me know on helen.dowling@exceptionalthinking.co.uk and I'll happily change your subscription settings so that you do in the future.
The last thing I want to do is annoy or upset anyone and I'm sure like me, you'd much rather I communicate with you if you're actually interested in hearing from me, so if you're not, that's fine - please ask to be removed by emailing me on helen.dowling@exceptionalthinking.co.uk and I'll take you off our database immediately.
Good question - and a difficult one to answer. Generally, I tend to think that if people are interested in what you're offering, they'll continue to subscribe to what you're sending out if they think it is of use either now or in the future.
If they're generally not interested, then they'll either just delete it or unsubscribe from your emails and that's fine too - surely you'd rather communicate with people who are genuinely interested in what you do?
People who I send out emails too generally get send a combination of three things: a newsletter, a monthly tips sheet and if they're based in Gloucestershire, Bristol or Birmingham some information about the workshops that we run. Depending on how I met them or what they've asked to subscribe to, they may get one of these emails or all three.
If you feel that you'd like to receive more tips or valuable information from us that you're not currently getting (i.e. if you're receiving information about the events, but would also like to get the newsletter or monthly tips) just let me know on helen.dowling@exceptionalthinking.co.uk and I'll happily change your subscription settings so that you do in the future.
The last thing I want to do is annoy or upset anyone and I'm sure like me, you'd much rather I communicate with you if you're actually interested in hearing from me, so if you're not, that's fine - please ask to be removed by emailing me on helen.dowling@exceptionalthinking.co.uk and I'll take you off our database immediately.
Thursday, 17 April 2008
Chasing people
I often get asked if you can follow people up too many times so that it seems like you're chasing them. And the answer to this question is yes as proved by an experience early this week when after chasing a potential client, they politely but firmly told me to 'go away'.
I think the main issue with following up is that the UK as a nation is very bad at saying no to people, so consequently we tell people "give me a call back in 2 weeks" or "I'll be speaking to my manager at the end of the month - give me a call back then" and if you're organised in your business, you dutifully follow up with the person at that time.
If only the person we're talking to would have the confidence to say "no, I'm not interested right now, but I will get in touch with you when I am', we'd know when to leave well alone.
Unfortunately, until that situation changes, we're left with no choice but to follow-up (or chase) people. Does that mean you shouldn't follow-up? Absolutely not and believe me if you don't follow-up, you will definitely NOT get the business.
But I would (for your own sanity) observe the rule of 3 - that is, if someone you've followed up with has given you an excuse three times for something, then they're not ready to buy just yet. With these clients, just drop them a quick email every 6 months or so to see how they're getting on. You'll feel much happier and you'll also know where you stand.
And if all else fails, they'll soon tell you when they've had enough - as this client did with me!
I think the main issue with following up is that the UK as a nation is very bad at saying no to people, so consequently we tell people "give me a call back in 2 weeks" or "I'll be speaking to my manager at the end of the month - give me a call back then" and if you're organised in your business, you dutifully follow up with the person at that time.
If only the person we're talking to would have the confidence to say "no, I'm not interested right now, but I will get in touch with you when I am', we'd know when to leave well alone.
Unfortunately, until that situation changes, we're left with no choice but to follow-up (or chase) people. Does that mean you shouldn't follow-up? Absolutely not and believe me if you don't follow-up, you will definitely NOT get the business.
But I would (for your own sanity) observe the rule of 3 - that is, if someone you've followed up with has given you an excuse three times for something, then they're not ready to buy just yet. With these clients, just drop them a quick email every 6 months or so to see how they're getting on. You'll feel much happier and you'll also know where you stand.
And if all else fails, they'll soon tell you when they've had enough - as this client did with me!
Tuesday, 8 April 2008
Loneliness in Business
Running a small business can be an incredibly lonely experience. Let's face it, we're all quite sociable really and even if we don't need to be around people all of the time, too much of our own company isn't good for us. I don't know about you, but if I've spent a couple of days in the office on the trot, I'm usually climbing the walls. So, here's my top five tips to making your business less lonely:
1: Go out! Go and see a client, go to a networking event, go running - whatever it is, if you're feeling lonely, the worst thing you can do is stay in your office. It's only going to make you feel worse. Even if it's the last thing in the world that you feel like doing, I promise you that if you go out (preferably to somewhere where there are other people), you will feel much better!
2: Join a group. One of the reasons that the breakfast networking events are so popular is that people are part of a group and they don't feel so alone. Could you join a group too? There are plenty to choose from - type BNI, BRX, 4Networking, NRG into Google to find a group that might suit you. You can also type in "local networking events" and see what comes back. Joining a group will help you see that everyone feels lonely at some point, but there is a way of getting over that feeling.
3: Get a business mentor or coach. A business mentor or coach is someone who can help you with your business. You should be able to bounce ideas off them and they should help you to reach a solution, although they shouldn't run your business for you. And of course, they're someone to rely on if you're feeling lonely or struggling in your business. Business Link usually run low-cost mentoring schemes. Check them out to see if there is one in your area.
4: Find something that inspires you. When I find something that inspires me in my business, it's a great feeling - I find that I'm buzzing with idea and can't wait to get on and do something about them, which leaves no time for feeling lonely. Why not read an inspirational book, go and watch a professional speaker, download a podcast or watch a motivational video? Finding something that is motivational and inspirational can make you feel a whole lot better.
5: And finally, if all else fails...why not team up with other small business owners that you know and try to help each other? All of us feel lonely from time to time and I will guarantee that they'll be others feeling the same way. Speak to small business owners at networking events etc and see if you can meet for coffee. Better still, get a small group together and see if you can meet to help each other out. A word of warning on this one though - make sure it doesn't turn into a moaning match, which will make you feel worse. Make the focus on helping each other out.
There are loads of other tips about motivation in my e-book "How to re-kindle the passion for your business". Find out more details at: http://www.exceptionalthinking.co.uk/Survive-Course.php
1: Go out! Go and see a client, go to a networking event, go running - whatever it is, if you're feeling lonely, the worst thing you can do is stay in your office. It's only going to make you feel worse. Even if it's the last thing in the world that you feel like doing, I promise you that if you go out (preferably to somewhere where there are other people), you will feel much better!
2: Join a group. One of the reasons that the breakfast networking events are so popular is that people are part of a group and they don't feel so alone. Could you join a group too? There are plenty to choose from - type BNI, BRX, 4Networking, NRG into Google to find a group that might suit you. You can also type in "local networking events" and see what comes back. Joining a group will help you see that everyone feels lonely at some point, but there is a way of getting over that feeling.
3: Get a business mentor or coach. A business mentor or coach is someone who can help you with your business. You should be able to bounce ideas off them and they should help you to reach a solution, although they shouldn't run your business for you. And of course, they're someone to rely on if you're feeling lonely or struggling in your business. Business Link usually run low-cost mentoring schemes. Check them out to see if there is one in your area.
4: Find something that inspires you. When I find something that inspires me in my business, it's a great feeling - I find that I'm buzzing with idea and can't wait to get on and do something about them, which leaves no time for feeling lonely. Why not read an inspirational book, go and watch a professional speaker, download a podcast or watch a motivational video? Finding something that is motivational and inspirational can make you feel a whole lot better.
5: And finally, if all else fails...why not team up with other small business owners that you know and try to help each other? All of us feel lonely from time to time and I will guarantee that they'll be others feeling the same way. Speak to small business owners at networking events etc and see if you can meet for coffee. Better still, get a small group together and see if you can meet to help each other out. A word of warning on this one though - make sure it doesn't turn into a moaning match, which will make you feel worse. Make the focus on helping each other out.
There are loads of other tips about motivation in my e-book "How to re-kindle the passion for your business". Find out more details at: http://www.exceptionalthinking.co.uk/Survive-Course.php
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