Gerald,
Your advice, if heeded, would eliminate most of the problems that a small business owner has when working with big business.
Senior Member
Gerald,
Your advice, if heeded, would eliminate most of the problems that a small business owner has when working with big business.
Senior Member
Mike, it took me a long time to realise that is the system. It is a very simple set of logical principles - so simple that business schools don't bother to teach them.
Senior Member
I can't contribute from the BIG point of view, but another common technique I have encountered is the "standard" practice of asking for a discount. My former partner had a repeating order from a customer who was bought by a larger company. When it came time to reorder, his contact had to pass the call to the purchasing department, who asked in all sincerity if he could do the same job for 10% less. When he replied no, but he'd be happy to do the same work for 10% more, the purchasing agent said something to the effect of "that's fine, I just had to ask". Part of their job is to beat down the suppliers to increase their own bottom line. You don't have to fall for it.
Member
I solved most of my slow pay problems. I hate to do business this way, but I found I like to eat after I pay all my bills. Previous to these policies 60 to 90 day payment was the norm, and if the big companies found you would put up with it you wouldn't see any money for 120 days.
In my business I encounter large companies and individuals. So I have two policies to cover the varied needs.
One time customers, (whether individual or corporate) pay 50% up front and 50% on completion. All purchases under $1000.00 fall under this policy.
Production Items from companies require a written Purchase Order. When I bid a job the terms and conditions are contained in the bid sheet. These conditions are also included on the invoices.
Trade Credit Terms and Conditions
Payment on all invoices is due whithin (30) days of the invoice date.
Payment delays may prevent timely shipment of orders.
All overdue invoices bear interest at 18% (1.5% percent) per month on the unpayed balance. (I inforce this dilligently.)
Debtor agrees to pay all costs of collection, including any court costs and attorneys fees.
All transactions are governed by the laws of the state of Texas.
I inquire about the invoices 15 days after submittal. All invoices are emailed and sent by mail. If I don't recieve payment by the deadline an email is sent to the purchasing agent, his supervisor, the accounts payable and his supervisor. If payment is not sent fedex next day the CFO gets an email and a letter sent plus a phone call at least 3 times a day until payment is recieved.
I have never lost a costomer with this policy. An added unexpected bonus is I have gained respect from those I have had to collect from.
Also the payments start coming in on time. I have actually picked up extra work while discussing the payment problems with a customer.
(Always be polite when discussing payment. Remember the person you are talking to may not have control over the situation.)
olecrafty@charter.net
Senior Member
Over here, the invoice date only counts as far as to identify the month which it is in....A February invoice is typically considered "30 days promptly paid" if it is paid by the last day of March and often a discount is given for this "prompt" payment. Moral of the story, get deliveries in before the month ends - don't delay the invoice, you might miss the month cycle.
My father realised one night, while lying awake thinking of a customer who hadn't paid his bill, that he shouldn't be the only one lying awake. So he called his customers at whatever hour and suggested they need also to lie awake thinking about their side of the issue.
Senior Member
I think that sometimes we try to be more important than we should be. The world is a big place with lots of people who are all trying to take care of themselves and their families. I might have a Polyanna view of the world, but I usually give everyone credit for being honest and upright unless he/she proves differently. Even then, I usually give him/her a second chance before taking an unfriendly stand. Standard methods have evolved that are well accepted by the business community. Expecting everyone to conform to our ideas on how to run a business might not be the best way to get the job done, especially when our ideas run contrary to established business methods.
Gerald's post further up on this thread outlined a very viable, and uniform, way of accepting orders and getting paid for those orders. It might be a good idea to remind ourselves that we are business people who use a Shopbot to create a product. The business part of us needs to develop the skills to run a business just like the craftman side of us needs to learn to create products using a Shopbot.
Getting paid for our work is essential, but expecting the World to change directions to meet our own expectations might be a bit much.
Senior Member
I think with anything else, there are no 'right' or 'wrong' ways of doing things, as long as you remain effective in your business dealings. If customers keep coming back, then life is good. If this is not your experience, then you alter your paradigm & methodology to ones that do work. Eventually you settle into a system that you are comfortable with. There isn't one recipe for billing...and there is no 'right' or 'wrong' way as long as you get paid in a timeframe that you deem reasonable.
Just about every one of us experienced the 'Cash & Carry' rules of doing business when we bought our ShopBot(s)...100% paid in FULL before you get your tool. I use the exact same method (or 50% dn & COD). It works for those who choose to implement such policies. As Ed points out, they have absolutely no qualms about telling you that they will just sell 'your' tool to someone who does have the money now...I don't think that ShopBot asks the 'world' to change; only to accept payment terms. I think that ShopBot must have made themselves important enough to accept nothing less than that way of doing business; that seems pretty reasonable to me.
-B
Senior Member
The ShopBot business model is fine when a very small percentage of your customers bring repeat business. Practically every customer is a new one and it makes no sense to do a credit analysis of every single one when you have guys lined up willing to pay cash for your product as fast as you can produce.
Senior Member
Point taken. If you scroll up you will note that Gene & Lonnie use the same basic model as ShopBot...and both of them do more business than you can shake a stick at. I guess that's really the whole idea with business...to have people lined up to buy your product as fast as you can produce it, right? If that isn't the ultimate objective of any business model, then what is?
-B
Senior Member
Brady, if I may be so bold (cheeky) to ask, having made it really clear that you take a 50% deposit on order and final payment on delivery, do you really hold ShopBot to that when they order videos from you?
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