A series of recent events have caused me to realize some things, short burst of epiphanies over different situations and circumstances that have gotten me thinking about how business can be better.
So let me just crank out a few business tips.
1. Guarantee Your Work
At the end of the day when your work is done, it is more than just being able to deliver what you committed to your client within the appropriated time and the agreed amount.. it is impressing them with what more you are able to do.
One of the things I love to do as a hobby is play with the band, and though we hardly look at ourselves as rock stars, famous or people who are in show business, I am reminded of this line which goes, always think of the next show as the last show, so you’ll really give it all you’ve got; put your heart into it and make it a really great show.
My ex boss, when I used to be DJing on radio always said, “always do your show like it was your last show.”
This movie about a live radio program’s last show before getting cut and taken off air, had the main anchor/host r say something like, “I always do it like it was my last show.”
Don’t just deliver your best, top it.
2. Choose Clients Well
In retail or any other kind of industry, the consumer simply chooses the brand.
Here is Mrs. X probably in the grocery store and she’s thinking of cooking pasta tonight, and she needs tomato sauce maybe, and voila.. she sees a can of Brand Y tomato sauce, picks it up and tosses it into her shopping cart. She might have seen an ad for the product on TV, so she needed no more convincing, she pays for it at the counter. End of story.
Joe walks into a store full of jeans not really knowing what pair to buy exactly, but sees a pair that his friend has, and this friend wears that pair often and has mentioned that he likes it very muchd. Joe, tries it in the fitting room, likes it… and pays for it and has it bagged. Joe doesn’t need much convincing either, he just needed to try it out to know for sure if it works for him, and once he was sure, he paid for it.
In both examples, the consumer chooses the brand, in the second example the consumer needed to be absolutely sure that the brand is for him.
For those who are in a business offering a specialized service such as advertising, its a similar game with a few twists to the rules. The client doesn’t pick you outright, they screen you with a bunch of other people; ask you to deliver a pitch and proposal, evaluate and haggle your price, and so on and so forth. Not exactly a walk on the park as it undergoes a process that could be lengthy where somewhere in the process negotiations could get stalled and meetings may not lead to fruition. However, in the end when you get the deal, the client has still “chosen you”. Like the above examples, but undergoing more complicated processes.
If I may sidetrack briefly to squeeze this in, every business has a sales process, but the businesses that thrive and grow are those that do not focus on the sales process but the buying process. Look at a transaction, not from your own eyes, but from eyes of a buyer. Worry not about how to sell a product to the buyer, but give some thought to how the buyer, buys your product.
Back to the story.
After giving some thought to it, I realize we are so used to chasing clients, and them so used to being chased that it has become common that some expect to be chased, and service providers ready to chase.
In the effort of sealing a deal, and making a sale, we accept any client, at a flexible price. It becomes a competitive race for survival. There are no published rates, but a negotiated rate, with the amount varying from one client to the next.. depending on what it took for them to sign up with you.
Now, your cash flow is what keeps your business running, and properly managing your cash flow is what will keep it running. Cash flow to your business is gas to your car.
If you run a business, you are no stranger to expenses incurred without fail every month, operational expenses.. marketing expenses… etc. You know these expenses come at specific times and so you also need income or collections at fore-casted times; amounts coming in to cover for amounts going out.
By choosing a client well, it is best to evaluate their paying habits as this will have a profound effect on your cash flow. A client that pays late, or pays in a manner outside of your agreed terms, will put your projections at risk and you will end up throwing numbers around to balance figures and to meet your own expenses. What is worse is, if your client never pays, for whatever valid reason there maybe, the more trouble you are in. Unlike the example above where buyer immediately pays for the product, specialized services have even more specialized payment methods, schemes and processes.
This is a prelude to tip 3, much later.
In conclusion, if you are able to guarantee your work, and you know you do a great job, the work shall speak for itself… stick to your price, go with clients willing to pay your price and willing to pay in a manner that will not put to risk your cash flow, and compromise your operation.
People do not realize that income collectibles are a wasted resource, it is like gasoline you could have used to drive to a destination, but since you could not use that unavailable gasoline, you ended buying gas or worse.. “borrowing/loaning gas”, that you need to pay for later with interest.
There is that value of money which you were unable to maximize; you were unable to make that money work for you and your business. Since that money sits in the coffers of your client (however not to be taken literally) as they are unsettled yet, the client being the possessor of that amount due, is the one who has maximized on its value the entire time and continues to maximize on it with each passing day that they are unable to pay you. They should be charged interest when they finally settle!
3. Pay On Time, Pay Promptly
There is this vicious cycle that occurs when you do not pay on time; whether in a B2B (business to business) setting or B2C (business to individual consumers); this is a viral domino effect that manifests itself in the form of businesses or people simply being unable to pay their payables on time because they are unable to collect on time. This causes economic turmoil, as business or people look to alternative funding either by subsidy or by loans to meet payables that could have been met if only they also got paid on time.
Subsidy could be you using money allocated for something else, or a previously turned profit… to fund that payment, or you borrowing money to make the payment. A loan is self explanatory, but the thing you should note is that it carries interest.
Let me give you an example, and see if you relate.
Let’s say you expected a certain amount at a specific time, and around the same time you expect to pay a couple of people a certain amount, taken from that expected income. Now, on the first month delay or second month delay, you would probably wait it out and hope that the people you need to pay will also wait it out. With that happening, these collectors are also put in a bind because of the inability to collect from you.
By the third month an amount came out but not enough an amount to pay what was owed over the past two months, and so with pressure coming from creditors, you end up using your own resources, and maybe later you eventually have to make a loan to pay these creditors.
Another simpler example is.
If you worked for a company and you did not get paid for say, two months, and in those two months you used up your savings. Let us say you are expecting a total of .. let us simplify so we can do that math quicker, let us say for those two months of pay, you are expecting to get P100. Now, since you still have not been paid, with your resources gone, and probably you stupid enough not to take it as a sign to quit and look for another job, you end up making a loan here and there. Now if your total loans added up to also P100, you are already in the red, because when you finally collect the P100 the company owes you, you do not pay your creditor just P100, but you pay them interest too. wouldn’t you just like to tell the company who owes you that, they owe you interest too?
So bottom line is, settle payables on time, because this causes a viral chain.. a chain that could and might loop right back to you.
Some businessmen would probably retort that they are just effectively managing their cash flow, and prioritizing other more important payables, and settling first those which directly affect operation of the business. To that I would also say, if your cash flow is in the red, and that being the reason your holding off on payments, could that already be a boomerang effect that has come back at you; your being also be unable to collect on those who owe you.
4. Know Which Accounts or Clients Generate Bigger Returns
What is important is to be aware.
If you were to spend much time and energy on an account that paid you a quarter, and end up snubbing a client that pays you a dollar for the same time, effort and energy spent, don’t you think you risk losing the dollar over the quarter?
The fact is not all clients are the same, but we should give equal attention to all, and not forget and take for granted other accounts we might be on the verge of losing, and who might actually be our main pie, because we were too busy with fixings on the top.
This is business, and our goal is business longevity and profitability, at the same time looking after the financial security of our employees; something you cannot risk compromising by getting a bad account.
A Recap Of the Tips Simplified
1. Guarantee your work, your work is your best advertisement and happy clients your loudest bullhorn; stand by your work and its price, if you deliver value and you know how much that value is worth, stick with it.
2. Choose clients well. You render to them guaranteed value, they owe it to you to compensate you accordingly.
3. Settle your payables on time, delaying payments might cause a boomerang effect that would lead right back to your and manifest itself in your being unable to collect on those who owe you.
4. Know which accounts are the pie and not simply toppings. Try and be fair to all, regardless of how much business they are giving you, losing a client would be fine if you lose him on his own volition or choosing and without negative or ill thoughts about you or displeasure over your work. That would free up your time and resources and allow you to spend more time on other income streams that generate more for you.
I hope you enjoyed this rather lengthy post. If you like to read more, please check out my main blog at www.roysencio.com.
In closing I would like to share this file that is about wealth consciousness… this is a very interesting audio file that will change the way you look at money. I know it did for me. To listen to the audio just click the little blue arrow beside the CD’s below. To go to the site and listen to the audio there, click the book at the right.
cforms contact form by delicious:days
