People will tell you that marketing is the most important skill or tool you should have; others will say customer service; and yet others will say pitch perfect salespeople, but in my view, they're wrong.
Of course these things are important; without marketing, customer service and sales you wouldn't have much of a business.
But let me tell you what are THE most important areas of your business to focus upon in order to prosper and grow
Let's have a look in-depth:
Credit Control means controlling the money you give 'on credit'. If you deliver goods and allow your customers to pay later, you're extending credit. If you allow clients to pay 50% up front and 50% 30 days after you've provided a service, you're extending credit. If you allow customers to pay a monthly invoice by cheque or bank transfer rather than standing order or direct debit, you're usually extending credit.
Which is fine – if you can keep on top of it. If you know who is paying when and ensure that they do. But it only takes a couple of bigger clients to pay late, or a BACS payment to be missed without you noticing, and your business could start to slide. Before long you're spending more time chasing money and payments than new customers and it could be the beginning of the end.
The flip side of credit control is debt control. While I understand that sometimes bills are paid late, and sometimes there are valid reasons, I speak to clients day in day out who have been owed thousands for months, when a good bit of debt control in the beginning would have kept on top of it.
Imagine someone pays you £100 a month for a service and one month the payment is late. You have two choices; chase the debt immediately in a friendly manner and encourage the client to pay while the amount owed is quite small. Or allow it to build up into 10 months of owed monies, chase for £1000, scare the customer to death and never see them (and maybe not your money) again.
Keeping on top of what people owe you means that you can nip any problems in the bud – not to mention that in some cases it can mean you getting paid rather than finding out 6 months later that the company owing money went out of business owing millions!
Wouldn't it be great if every order form you received had one of two stamps on it?
“He's loaded and pays his bills on time – go for it”
“He's skint, bluffing and lives in his car – don't touch him with a barge pole”
If every time you take an order and extend any type of credit you have no idea of how credit worthy these customers are, you're taking a risk. And you're gambling with YOUR money, let's not forget, not theirs!
Make a point of doing credit checks on the people you extend credit to – it shows them that you're serious and flags up any potential problems early on.
So what's a business to do?
Larger companies may be able to hire people for debt and credit control, and buy credit checks on every customer that comes through the door.
For everyone else, I'd recommend the following 3 pieces of software:
Credit Guardian - Check your prospects and customers out for Credit Risk; FREE software and annual subscription based on the number of companies and linked with Experian
Credit Hound - Chase your debtors with Self-Chasing Credit Control software and make sure that you get your money back
Debt Recovery – Harley Grove are pleased to have partnered with TAK-Outsourcing.com to provide this service for when nothing seems to work when trying to get your money from your debtors.
Don't let bad credit risk, bad credit control and bad debt recovery bring your business to its knees.
WHAT NEXT ?
She walks into your office for a meeting, immaculately dressed in an Armani suit. The Gucci bag she's carrying screams good taste. You're sure those shoes are Prada. And she's wearing enough Swarovski jewellery to blind an army.
As she rests her immaculately manicured nails on your desk, you catch a smell of Chanel Number 5, and wonder how much the cut and colour of her hair cost; it obviously wasn't done at the local Supercuts salon that's for sure!
Everything about her oozes classiness, and it seems that money is no object.
She wants your marketing and promotion services, and is happy to pay for the best. You quote a price that most people would raise eyebrows at, and she accepts without the hint of a worry.
She offers to pay a deposit, but will of course want a decent discount, or else she'll be happy to pay in instalments over the next year. She's good for the money of course.
She pulls out the Platinum Amex card, and reminds you that monthly payments mean you have a steady income, she knows what's going out of her bank account (she keeps a VERY close eye on her finances, you know) and you'll have a long term relationship. And, of course, she'll add on extra services each month so that your monthly fee will just grow and grow.
You think of your mortgage and how handy guaranteed money would be, and agree, glad to have such a wealthy and discerning client aboard. As soon as she's left the office you plan how you'll work all the hours there are, which smaller clients you can ditch and how you can get all her work done soon so she knows how good you are and starts ordering now.
Feeling proud of yourself for closing such a fab deal, you close up early and go home to tell the wife and kids.
As you do you walk past a grotty flat above a corner shop. Out of a banged up old car that's pouring diesel fumes, you don't notice the woman wrapped in the motheaten old coat get out of the car and let herself into the flat.
You don't see her take the Armani suit off, check to make sure the tags are still there and put it back in its box to return. She puts the 'Gucci' bag back with the other replicas she's bought for a few pounds from eBay and is grateful you didn't look too closely. The fake jewellery and shoes follow suit, and she smiles as she thanks God that Boots still offer perfume samples. Those immaculately manicured fingers dial her hair and nail specialist sister, to thank her for the freebie she got as an early Christmas present, and she promises to return the platinum Amex card when her sister buys her lunch the next day.
“Hey sis,” she says “I think it went well. They took my order, and hopefully the work will bring in enough business to pay off the other 3 marketing companies and my debts, as well as them, before the first invoice is due for payment. Maybe this deal will be the one that saves my business…”
It's an extreme scenario, but every day small businesses essentially give credit to people they hardly even know. Imagine if that person placing the large order with you was 5 weeks from going bust? Maybe the company so eager to put down a deposit to get better payment terms has a history of paying their bills really late?
YOU'RE the one that's going to suffer in terms of cash flow, hours spent chasing debts, and possibly even only narrowly avoiding bankruptcy yourself.
That's where Credit Guardian comes in. Credit Guardian™ is a brand new approach to managing credit.
Created by Draycir and powered by Experian, Credit Guardian™ gives small and mid-sized businesses affordable, year round access to business intelligence, helping them make better and more informed choices about managing customer credit.
For a FREE Download of the software and FREE monitoring for 90 days of 3 companies (these can be your customers, suppliers, prospects or even your own company), visit our Credit Guardian page or click on the download link above on the right..
WHAT NEXT ?