Archive for Finances

Feb
29

Financial: Tips for Getting Clients and Customers to Pay Their Past Due Bills

by Contributing Author: Paula Langguth Ryan, Strategic Financial Consultant

Ever have a client fail to pay a bill? I once actually had a bankruptcy attorney order a large book order and then go bankrupt! Now, most clients and customers who are late on payments aren’t going to go bankrupt on you. But they may be having challenges that are preventing them from paying.

The WORST thing you can do is to constantly hound your clients. Yes, them not paying maybe affecting your ability to pay your bills. But pressuring them to pay you so you aren’t worried about paying your bills doesn’t create an incentive for them.

The truth is, your clients and customers WANT to pay you. So the trick is to figure out ways that they can do so that are win-win-win. My father owned a construction company. He arranged payment in barter whenever a client was short on cash. We got a wonderful school-quality playground set that way. My father even got paid nearly twice what a job was worth when someone gave him a boat in payment, which he then turned around and sold to generate the cash he needed for paying the bills. I once got a BMW Z3 in payment for work I’d done. Which worked out wonderfully, since I was in the market for a new car!

Instead of pressuring your clients to come up with a big lump sum, be willing to take weekly or monthly payments of even as little as $5 or $10, set up in an systematic way. When you do this, you free up both of you to work on building your businesses rather than scrambling to pay creditors.

Please leave a comment below if you would like to share your challenges or successes with getting clients to pay their bill – we’d love to hear from you!

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Paula Langguth Ryan is a mediation and marketing maven, specializing in financial issues for small businesses. She’s the creator of the Supersonic Prosperity Oriented Copywriting System http://www.paulalangguthryan.com/shop/supersonic-copywriting/ and provides strategic financial consulting services to small business owners. She’s also the author of Bounce Back From Bankruptcy: A Step-By-Step Guide to Getting Back on Your Financial Feet and the forthcoming Break the Debt Cycle – For Good! You can follow her on Twitter at copytamer and get free resources at www.paulalangguthryan.com. If you need help or assist please email us at info@kickstartwebsites.com.

Categories : Finances, Running Your Business

Feb
15

Financial: Did You Finance Your Business with Credit Cards? Still Paying?

by Contributing Author: Paula Langguth Ryan, Strategic Financial Consultant

Financing Your Business with Credit Cards

Two common ways small businesses get start-up capital are savings and credit cards. While I recommend savings as the best way to go, using credit cards instead of a bank loan makes sense when you don’t have any collateral to offer a lender. The problem comes when you’re years into your business and you’re continuing to use your credit cards on a regular basis, or are trying to pay them down with no success.

The best way to use credit cards in your business is to purchase large items, like new equipment for expansion (we’ll cover the best ways to do THAT in a future column!), printing or production costs, or training. These are single shot expenses that offer a concrete payoff, and come with a finite payment amount until the debt is repaid.

What if you’re using your credit cards to float your monthly expenses?

It’s time to look at your monthly expenses and the amount you’re drawing out of the business for yourself.

Try this experiment:

Go one month without having anything “automatically” charged to your credit card, and without using your credit cards to pay for anything.
Use only an automated debit card withdrawal, pay by check, or use cash (save your receipts!).
If you have more month left over than money, you’ll know it’s time to pare back.
If you have more cash left over than month, then you’ll know you’re using your credit cards wisely, as long as your balance isn’t going up each month!

Now, what if your balance continues to climb, or you’re paying down a chunk, charging it back up, then paying it down again?

Here’s the strategy I give folks in my Break the Debt Cycle – For Good! workbook and CD.

Start paying JUST the minimum payment, charge absolutely nothing new to the card, and save the extra chunks you had been throwing at the balance each month.
Build the savings cushion, then increase your payments until the bill is paid.
You’ll live within the cash flow of your business and set aside money for future unexpected expenses.
The savings are there to take care of extra bills without adding to your debt.
You’ll slowly and steadily get out of debt AND you’ll find you have much more creativity!

Share with Us and Others!

Please share with us how you financially started your business.
How are you financing your business now?
Do you need more help with credit card debt?
What are you doing that helps?
What are you doing and is NOT working?
Post a comment, press the Share buttons, sign up for our blog posts and newsletter!

We’d love to hear from you and keep in contact – thanks for reading!!!

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Categories : Finances, Running Your Business

Feb
8

Financial: How to Calculate Your Business Expenses For Maximum Profit

by Contributing Author: Paula Langguth Ryan, Strategic Financial Consultant

Calculate Your Business Expenses

I had a client once who spent hundreds of dollars buying matching furniture, matching file cabinets, hanging files and even matching folders. All for a space that no one else would ever see. Yet she had a challenge some months paying the basic bills (electricity and internet, for example) because her cash flow had been depleted.

Whether you’re starting business, or reassessing your business finances, it’s always a good time to examine your expenses to make sure you have ample cash flow.

Start by sorting your expenses into essential and optional expenses. Then review the list and double check every item you’ve considered “essential.” Is it truly essential? Meaning, will this expense enhance your efficiency and profitability?

For example, spending money on a transcription machine versus starting and stopping a recording manually, speeds up your ability to transcribe audios and maximizes your time. In this case, the transcription machine might be an essential expense. Hiring someone to do the transcriptions would be an optional expense; one that could eventually become essential as you grow, but not necessarily a must-have right now.

Taxes, utilities, supplies. These are essential business expenses. Some others that might be optional (and some essential options that can reduce your monthly expenses!) are:

Full time secretary versus virtual assistant (full salary versus hourly needs)
Voice mail versus answering machine (monthly charge versus one time fee)
Purchasing equipment versus renting on an as needed basis (run the numbers yourself to see which is more economical)

You get the idea. Think outside the box. Look over every business expense with an open eye. A simple reassessment of your business expenses could instantly increase your profits 25%.

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Categories : Finances, Running Your Business

Feb
1

Financial: Top Tips for Taking Credit Cards in Your Business

by Contributing Author: Paula Langguth Ryan, Strategic Financial Consultant

My merchant account bank was one of those California banks that closed its doors. After nearly 20 years, I was shopping around again for the best way for my company to accept credit cards. Thought I’d share a few of those tips with you this week to help you if you’re searching for the best merchant account for your business.

The quick and easy low-cost way to start accepting credit cards in your business (Visa, MasterCard, American Express and Discover) is through PayPal. With PayPal you can set up your merchant account instantly, there’s no credit check involved (except with their Pro version), you don’t arrange for a separate gateway account and credit card deposits are instantly credited to your account. PayPal does have drawbacks. The process for setting up each new product is a wee bit cumbersome. [Editor's Note: Unless you integrate your PayPal account with a WordPress Shopping Cart, such as Cart 66 or Shopp - makes life easier to add products!] And if many of your clients like to pay by check, it usually takes 3-5 days for checks to clear. The fees are pretty reasonable and there are no set up fees or monthly fees. You can use a PayPal debit card to pay your bills, but if you want access to the money in your business account, you’ll need to sweep it over, which takes 3-5 business days.

A standard merchant account will automatically sweep the money into your bank account for you. And e-checks usually clear immediately. When comparing merchant accounts, make sure you know ALL the fees that will be included: Setup fees, gateway charges, discount rate (usually 1%-3% of the purchase amount), transaction fee (another 1%-3% of the purchase), and monthly statement fee. Some merchant accounts also charge you if you don’t meet a monthly minimum amount of sales.

What does all this mean for your bottom line? Make sure your product prices take these fees into account. Adding in an extra 10% to account for all your merchant fees is a good standard practice, once you’ve established your cost basis and your profit margin. For more details on how a merchant account works or to compare different accounts, visit www.merchantaccountguide.com or www.shift4.com. Both have wonderful resources for just about any question.

Editor’s Note: If you have a business that you sell at events; back of room sales, festival’s, etc. check out this neat little, and inexpensive way to accept credit cards using your mobile phone! Square

What do you use or how do you accept credit cards? Please share by leaving a comment below and be sure to sign up for our blog posts while you’re here!!

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Categories : Cart66, E-Commerce Solutions, Finances, PayPal, Running Your Business, Shopp

Jan
25

Financial: When Can a Credit Counselor Help if Your Business is Deep in Debt?

by Contributing Author: Paula Langguth Ryan, Strategic Financial Consultant

The biggest problem with debt when you’re a business owner is how much of your time and energy gets sapped worrying about money. When the big boys get bogged down with debt, they strategize. And they take action. Sometimes a radical solution is necessary, like a business restructuring (Chapter 13 or Chapter 11 bankruptcy). Other times, working with a credit counselor may be all you need.

Credit counselors can help you set up a workable budget and repayment plan. You write one monthly check to the credit counseling service and they divide the money up among your creditors. Your budget may seem tight at first, but you will find you could be completely debt free within three years. Most credit counselors work with your creditors to get them to accept smaller payments from you, and attempt to freeze or lower interest rates and late payment or over-the-limit fees. In addition, once you’ve entered into a repayment plan with the counselor, the harassing phone calls from creditors will stop.

Before you sign up, though ask these questions:

1. Which of your creditors have worked with you in the past to reduce payments, or freeze or lower interest and fees? Make sure they have experience with your creditors.

2. When will my creditors be paid? Some counseling services have a set date each month when they pay creditors. Your creditors could wind up being paid after their due dates. Make sure the counselor can get your creditors to change the due dates.

3. Can I pay you electronically or do I have to send a certified check or money order each month? You’re much more likely to stick with a repayment plan if making that single payment to the counseling service is a “no-brainer.”

4. How often can I see statements of my accounts? Your counselor should send you at least monthly reports on your progress.

5. Will I always deal with the same counselor and will I hear back promptly if I leave a message? Make sure you’re comfortable with the answers you get, and that you’re comfortable with the people you might be dealing with.

There’s no obligation or payment due to any good credit counselor until after you’ve determined what your monthly payment would be under the plan and you’ve decided to join their program. I encourage you to explore all your options and then pick the one that makes you feel most comfortable

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Categories : Finances, Running Your Business

Jan
19

Financial: Negotiate with vendors

by Contributing Author: Paula Langguth Ryan, Strategic Financial Consultant

How to Negotiate Effectively With an Essential Vendor/Creditor

Just as the economic crunch hit hard in Florida, a client there approached me with a dilemma. She owned a restaurant and was behind on paying her main supplier. Things had gotten so tight the supplier was refusing to make any more deliveries until the account was paid in full. Without this weekly delivery, however, she couldn’t create the meals to sell to raise the money to pay the creditor her past due balance. She had run out of ideas and was seeing the creditor as her enemy.

The truth is, your creditors are your friends and allies. They’re the ones who make it possible for you to run your business. The trick to negotiating effectively with a vendor or creditor who is thinking of cutting you off, is to help them see what’s in it for them. This strategy won’t work with big corporations, like your cell phone or your electric company, but it will work with smaller vendors.

Here’s the bottom line. If you default on a small vender, they don’t get paid. If you’re out of business, you can’t pay them. It’s in their best interest to help you stay in business, which helps THEM stay in business. Giving your creditor a solid strategy to say yes to you is the key.

Start the conversation by letting your creditor know that your intention is to pay them in full. Then let them know that you can pay the current bills as they come in. And as long as you can continue to get deliveries, you can also start to pay them the past due amount. If you can’t get new deliveries, you’re out of business, and that makes it difficult, if not impossible for them to get paid what they’re owed.

Again, reiterate that your number one goal is to get them paid off. And that you need their help to accomplish this. Then propose a repayment plan. Agree to pay cash on delivery for all new products. And to pay a small extra amount of $25, $50 or $100 a month to get the balance of what you owe them paid off. Any smaller vender with even a tablespoon of common sense will say yes to the deal.

Let us know what’s worked for you by leaving a comment below!

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