Slow-to-pay and no-pay customers can be a real headache for small business owners.

Those outstanding invoices often create havoc with a small business’ cash flow and can bring operations to a grinding halt- especially if the company is working on tight profit margins. But collecting on outstanding consumer debt does not have to begin with a bottle of aspirin.

Here are a few strategies to help small business owners get the most money from those outstanding invoices:

Develop a credit policy: Business owners should make sure to clearly outline the terms and conditions customers must fulfill to establish credit with the company as well as the actions that will be taken when accounts are overdue. This policy should be made available to customers and can be submitted with any invoices on overdue accounts so that these customers know what to expect.

Keep good records: Along with a credit policy, businesses need to maintain clear, accurate, and up-to-date credit files and payment histories on each of their customers. There are numerous accounting software suites, such as those offered by Quickbooks, Peachtree, MYOB, and Microsoft Office and even some decent free, open source options, such as GnuCash and NolaPro, that can help small business owners stay on top of their accounts receivables.

Be assertive, yet sensible with collection efforts: Trying to collect on overdue accounts is a delicate balance. On one hand, a business can often ill afford to be lax with collection calls and demand for payment letters. On the other hand, to keep loyal customers business owners should also take into consideration any external circumstances, such as economic conditions, that may affect a customer’s short-term ability to pay and make adjustments to the credit policy where it is feasible. Moreover, when deciding how to collect on an overdue account, a business owner should weigh the cost (in terms of money and other resources) of any collection efforts versus the actual amount that can be recovered.

Don’t stop the communication: Once the communication stops between the business and the indebted customer, the likelihood that the business will receive even some if its money is much less. All communication should be firm, yet clear and respectful.

Know what action to take and when: Business owners should be familiar with the different options available for collecting on outstanding invoices or reducing the loss.

• Send the invoice to a factoring company. If the outstanding account fulfills certain requirements, it can be given over to a factoring company. With accounts receivables factoring, the business will receive a significant percentage of the amount owed on the invoice up front from the factoring company and also be able to hand over the collection process.

• Find a good collection agency. For a fee, small business owners can enlist the expertise and services of a collection agency to nudge customers into paying on the account.

• Take the customer to small claims court. Though going to small claims court may not be such an attractive or even worthwhile option, there may be certain situations that warrant this course of action. A business owner, for example, may want to begin the process in order to influence a customer into reaching some kind of settlement.

• Claim the loss for a tax deduction. According to the Tax Code IRC 166, Reg. 1.166, business owners may be able to claim part of the loss on their subsequent tax return.

In short, with a little effort, know-how, and sensibility, small business owners can significantly improve their chances of collecting on outstanding invoices, and keep their heads clear for more important matters, such as running their business.

Photo credit: findgreatlawyers.com

Gary Barzel is the manager of business development for Fastupfront, which offers small business loans for existing businesses in need of working capital.

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The countdown to the New Year is under way, but are you still debating about what to do with that office cancer, you know, the employee who is causing more issues than they are worth?

For many employers, the decisions to let someone go is not always as cut and dry as it may seem to be. There are oftentimes a number of factors that go into such a decision, among which are:

• How will the dismissal of the employee impact the rest of the office staff?
• Have we tried all options to make this situation better before we pull the plug on the individual?
• Do we want to get the image of a revolving door company if we start getting rid of employees when there are other options?
• What exactly is the problem with this particular employee? Is it a work-related matter or something outside the office in their personal life that they are continuously bringing to work?
• What will the firing do in regards to any potential repercussions from the employee as far as negative press towards the company?

As you can see, pulling the plug on an employee is not always as simple as some may think.

Having worked in the business arena for 22 years now, I have seen tons of employees come and go in a number of jobs in two-plus decades. Oftentimes, those who were dismissed were more for financial reasons as opposed to work-site performance.

I found myself in this situation some six years ago when I was laid off after spending five-and-a-half years with one employer. Much to my chagrin, the employer let me go via an email and not face-to-face.

Now imagine the consternation many employers feel when employees just up and leave a job without two weeks’ notice. Should employers return the favor and let those employees they plan to remove either via firing or layoff be given such a notice?

In an ideal world, the answer would be yes. In the real world, however, we know that is oftentimes not the case.

If you find yourself in such a position going into the New Year, think about why you are planning to remove this employee, how it will impact your office and what possible repercussions may occur from a human resources stand point.

Letting someone go is usually never easy; sometimes it is just unavoidable.

As an employer, what do you find to be the toughest things about letting an employee go?

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Especially during the holiday season, some customers seem to take out all their frustrations on the businessperson and their company.

As a small business owner, have you been on the receiving end of an all-out verbal attack by a disgruntled customer who had you and your company in their firing sights?

If this has happened to you and you and/or your employees were not quite sure on how to go about dealing with it, there are some factors to keep in mind. Among them are:

• Stay cool and collected – While it is easy to want to fire off a nasty response either in person or through correspondence with the upset customer, you are just throwing fuel on the fire. By getting verbally upset with the customer, you are prolonging a situation that nine times out of 10 can be easily handled. Keep your emotions in check, listen to what the customer has to say, then decide the best course of action;
• Get the facts – There are many instances where information is misunderstood when being transferred to you from an employee regarding a customer issue. Make sure you get all the pertinent information so that you put yourself in the best position possible to solve the matter. One missing piece of information can easily derail you in the effort to fix the problem;
• Put you in their shoes – We have all at one time or another been in the position of being upset with a product and/or service. Take a moment to think how you would react to such a situation if the shoe were on the other foot. What would you want out of the situation? It is easier to deal with an irate customer when you have been there before on the other side of the coin;
• Offer an appropriate apology – Even if you know you are in the right, apologize to the customer for things coming to this. Oftentimes it will be determined that you and/or your employees did nothing wrong, but it still never hurts to apologize for the misconception that you did. The customer will become more disarmed when you offer up an apology up front;
• Find the best solution for everyone – When you find yourself in such a situation, come up with the best solution for all involved. While you want what is best for the customer, don’t throw one of your employees or the company for that matter under the bus.

Running a business invariably means dealing with some upset customers from time to time.

It is how you deal with them that determine whether they remain a customer or flock to your competition.

So, how have you dealt with upset customers in the past?

Photo credit: bestmarketingmanagers.com

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When the eggnog’s off the shelves and the last hangover’s finally faded, you’ll probably be in a mood to revamp your company in the New Year.

And you may feel like, what with all the ominous talk of a double-dip recession – when anything double-dipped sounds frankly delicious – and the fact that some of that talk comes from your iPhone, you’re getting to be a little behind the times. But business goes on (at least until December), and you have to be able to find the shiny new staff that can guide you through the gathering darkness.

So where to start?

No More Gold Standard
You’ll have golden boys walking in the door fresh from school, eager to get started, never having failed a day in their lives. And their work may seem initially impressive. But there’s a body of recession-hardened workers out there who know the stakes and know the field, and they’re the ones you’ll want to get your hands on. With a few independent, veteran workers at your side, there’s no limit to what you can accomplish.

Silver Lining
One of the most surprising lessons of the turmoil over the last few years has been that business plans tend to be far too short-sighted. Quick-release, go-for-broke, grab-bag tactics have seen their day, and are experiencing an agonizing twilight – even when they’re not at the movies. The market craves businesses that are oriented towards the long term, and that can offer solid, dependable, confidence-inspiring results. Consumers want to be able to trust your company, and build relationships based on mutual respect and good old-fashioned professionalism. So say goodbye, ‘Hi-yo, Silver!’, and hello ‘Hiya, Sir’.

Go For Bronze
The people you hire have to be savvy about the potential of all these new technologies to alter the way you do business – and more importantly, to predict how it will affect the industry at large. They also have to understand what’s expected of them in today’s demanding job market, without carrying too much of the anxiety that courses through the veins of the post-post-war post-post-boom post-postmodern American’s blood. There comes a point when you’ve gone through enough fire to know for sure whether you’re ash or bronze, and by this time, many of us have figured that out.

What They Need To Know
Your time is valuable, your hiring resources are limited, and it can be hard to pin down the few questions that will give you a read on the candidate. Consider these helpful shortcuts for getting to the bottom of their brain:

• Online Marketing and Social Media Basics
– By this time, your staff should certainly know how to get the word out on the internet, either through social media or more traditional marketing methods.
– If they don’t have some idea of how important it is before they come in the door, chances are they’re out of touch.

• Communicating Openly and Effectively
- Business relationships work so fluidly these days that good communication has become more important than ever, even among your lower-level staff.
- It’s not a shy game, and if the applicant isn’t able to carry themselves with aplomb and communicate their professional needs and concerns to you effectively, the relationship’s not going to last.

• Independence and Dependability
- Once you’ve set an agenda for the company and are looking forward to the next step, you need to know that your staff can function without your direct supervision.
- Things move pretty fast, and if your employees can’t prove themselves resourceful enough to carry out the broadly outlined tasks you’ve set, you’ll sink faster than you can swim.

What You Need To Know
With all the changes sweeping through the business world, it can be pretty hard to keep track of what matters. As frustrating as it can sometimes be, hiring is a welcome reminder that your employees are always the most important part of your success.

America’s bad boss Michael Scott may have left The Office, but his wisdom lives on: People will never go out of business.

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For the millions and millions of small businesses across the nation, having an Internet presence is very important, especially in this day and age of a struggling economy. Without it, those who stay away from the web stand to quickly fall behind the competition.

If your small business is considering a foray into sales and promotions on the web, do you know exactly what you are looking for in a web hosting provider? For many small businesses, they know exactly what they are not looking for in such a provider.

Keep the following in mind should your business be in need of a web host provider:

• Should you go with shared web hosting? – This is one question you will want to consider. One of the bonuses of choosing a shared web host site is that they are generally cheaper, with performance problems sometimes being an issue due to the number of customers sharing the site. If your small business has both light traffic and sales, then shared web hosting is likely the answer. For those companies overseeing ecommerce, it is advised to look for a provider offering a VPS (Virtual Private Server) solution, whereby your sites rests with its own virtual server, allowing it to be unaffected by others;
• Quality customer service is critical – Just like your business is supposed to provide quality care to customers; you want the same from your web host provider. If you’re constantly having to call them to ask questions, discuss concerns, complain about the service, etc. you will likely grow tired of this rather quickly. While many web host providers are pretty much the same during selling you their services, it is what they do when there is a problem that will set one apart from the other;
• Shop around for quotes – When your small business goes in need of supplies, it should be a given that you are obtaining a series of quotes. That being the case, you especially want to do that when in search of a web host provider. Also turn to those in the business community you are close to or family/friends to see who their provider is. Check for things like price, customer service, reputation in business circles and more;
• Check on bandwith and space – Along with price and customer service; get the details on things like bandwith and space, two things that are very important as far as what you can get on your Web site in a fast and orderly procedure. If someone tells you the bandwith and disk space they will be providing you is unlimited, get the specifics prior to putting your name on a contract. The last thing you want is a slow site that is continuously being impacted by a limited amount of space;
• Make sure there is a backup plan – As we have seen all too often, companies can be put in precarious situations should there be a data crash. Make sure you check with your provider that they have a backup plan in place in order to prevent you from losing a ton of data. You also want to make sure the web host provider you go with is up to speed on its security so that you are not saddled with hacking issues;
• Read the fine print – Lastly, make sure you read the fine print to cover any potential hidden fees, longer than you wanted contract language, early exit charges, etc. The last thing you want is dealing with unexpected expenses and headaches that could have been avoided in the first place with a little closer observation.

Given the importance of having a web presence in today’s business world, make sure you find the right host at not only the right price, but one who makes you a priority customer from start to finish.

Photo credit: earningdiary.com

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For the small business owner who needs short-term assistance in the workplace, choosing the right temporary agency is critical in order to meet the needs of the business.

That task, however, can become a little more daunting if you do not know how to go about correctly selecting a temp agency.

Do you just randomly find one in a phone book or online? Do you check around for referrals prior to selecting an agency? Do you go with an agency that is older and established or try a newer agency that may be a little less on the expensive side? These are but a few of the decisions a small business owner will have to make when they deem temp help a necessity for their company.

In the event you find yourself in that position, there are some factors your human resources department will to keep in mind in the selection process.

Among them:

• What is the duration of the position that needs to be filled? Figure out whether you need the worker/s for just a day, a week, several weeks, etc. This will make it easier for the agency you go with to locate the right individual. Some individuals are good just to fill in for a day or two if someone is out due to sickness, while others could be a good fit if the project you need covered is more of a long-term one;
• What are the possibilities of taking a temp worker on full-time? For some companies, they are looking for the temp worker who could be a long-term fit for their office if things work out. If you are looking along those lines, be sure to convey that to the agency so that they give you someone more in align with those thoughts. Some temp workers just are looking to earn a little extra money here and there and are not interested in long-term assignments. If you just need a quick fill in, be sure to express that sentiment up front;
• What are your evaluation techniques? – In some cases, businesses will bring on temp workers in order to try them and see if they might be a good fit for long-term needs. By doing so, they avoid having to hire some for the more traditional 90-day probationary period. In the event the temp doesn’t work out, they simply contact the temp agency and ask for another selection. While you don’t want to make a habit of doing this for your company, it is a good way to try out different people from time to time;
• What is the makeup of your office? – Some temp workers fit right in with a company’s staff and others don’t. Take into account whether you have a lively bunch of employees or a little more subdued bunch. Getting a temp worker who is more on the quiet side may not work with your staff if they are very outgoing. Also specify to the temp agency on exactly what type of personality you would like to work with you;
• What are your resources to train temp workers? – You cannot expect a temp worker who comes to you to know your system overnight. Do you have the time to properly train the temp who comes to you or will they be in essence on their own? The temp is only as good as the person who trained them, so make sure you have the resources on site to properly introduce the temp worker to your needs, how you run the business and more;
• What are you willing to pay for temp workers? – Keep in mind that what you pay for temp workers doesn’t always depend on which agency you go with. Oftentimes, a temp agency will charge a fixed percentage that is higher than the hourly expense of a worker. In many cases, the average temp rate will go anywhere from a little over minimum wage to $15 or higher. For those with more skills and in positions with greater responsibilities and/or education, rates can be as much as $30 an hour.

As you can see, there are a number of things to consider when working with temporary agencies and employees.

Assess your company’s needs and see if the work can be done in-house or if you are going to have to go outside to get the job done.

Photo credit: voluntarybenefitsmagazine.com

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For many small businesses, one of the incentives that can help draw good employees is having a 401 (k) plan which to offer them following their probationary period.

According to a recent report from Plan Adviser, close to 40 percent of small business workers claim they would depart their current employer for one that offers a 401 (k). A recent study from AARP indicates that retirement plans rank among one of the major reasons why workers select their employer.

With a 401 (k) plan, employees can invest for retirement, and in many instances, get a company match (percentages vary) along the way. Among the different 401 (k) plans are the traditional one, a safe harbor plan, and lastly the automatic enrollment option.

Even though the trend in the last 10 years has been for businesses to add to the number of investment options with their 401 (k) plan, a number of companies are changing their original train of thought and decreasing the number of choices, along with streamlining and simplifying their investment options.

If your small business is thinking about setting up a 401 (k) plan for its employees, there are a number of factors to take into consideration.

Among them are:

• Employers are able to receive a tax deduction for those funds contributed to employee accounts;
• Funds contributed can accrue through investments in things like bonds, money market funds, mutual funds, savings accounts, stocks and more;
• In most cases, the contributions and earnings will not be taxed until the time they are handed out;
• In many cases, employees can take their benefits with them and/or transfer them to a differing account when they leave a business. By doing so, the company is then free of responsibility of the plan.

Lastly, there will always be some unintentional gaffes that come with providing 401 (k) plans for one’s workers.

Both the U.S. Department of Labor and IRS have available correction programs to assist those sponsoring plans, making it all the more important that employers continuously review their programs to better avoid mistakes.

If your small business is considering instituting a 401 (k) plan in the New Year, get the necessary information to put things in motion.

Photo credit: entmoney.com

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Unlike the “old” days when employees oftentimes wound up spending several decades with a company, many of today’s employees come and go for a variety of reasons.

Whether it is seeking to find a better career fit, not hiring the right people in the first place, layoffs due to attrition, etc. more and more companies find themselves with revolving doors regarding their workers.

One constant, however, is the need and desire that many employers have in offering continuing education to their current employees, be it in project management, online IT training or other disciplines.

By offering continuing education to employees, employers stand to benefit in several ways. Among them are:

• Attracting a better pool of potential hires who are excited about the chance to continue their studies while under your employment;
• Increasing the wherewithal of your present staff by educating them on the latest news and trends involving their specialty;
• Giving your company more recognition in your specific industry as a leader, looking to educate its employees constantly so that they provide a better product for your customers.

If your small business is looking to offer/provide continuing education opportunities to its employees, take a few minutes to review exactly what is needed.

One of the most important things is to establish what kinds of education and what amounts of reimbursement you will offer. Given that the reimbursements will impact your bottom line financially, it is important that you get with your financial department ahead of time to see what is and isn’t feasible for your small business when it comes to reimbursing employees for college costs.

In the event your company does not financially reimburse employees for their studies, yet wants to support them, there are other means by which to do just that.

One thing your business can do is offer those employees who are continuing their educations the option of working different shifts to accommodate their class studies. By doing so, you show the employee that you as a business owner value their education, leading them to likely be more productive and loyal.

If you are interested in or are just setting up continuing education at your company for the first time, take the time to research the various options out there. Find out what kinds of programs other companies similar to your business are offering, along with seeing how much they cost and what kind of results they have yielded.

With the national unemployment rate still sitting around 9 percent, there are plenty of workers out there for those small businesses looking to hire.

The task becomes locating the right ones, then providing them with continued opportunities to succeed by educating them and allowing them to stick with you for a long time to come.

Photo credit: adminsecret.monster.com

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Did you know that the average American small business could save as much as $5,000 per year by becoming 25 percent more energy efficient?

That’s what a study by the National Small Business Association discovered. It also found that if all small businesses made this effort, greenhouse gas emissions could be reduced by 259 million tons — or the equivalent of 51 coal-fired power plants.

No matter what type of green your business is counting, everybody wins with energy efficiency.

But the upfront costs of acquiring more energy-efficient equipment can often be a hurdle for small businesses. If you’re a small business owner looking to cut costs and do your part for the environment, your local utility may have innovative energy-efficiency programs and varying incentives to help.

For instance, in San Diego County, where 95 percent of businesses are small businesses, San Diego Gas & Electric (SDG&E) launched a no-cost program targeting small to mid-sized commercial customers in February 2011, and many are taking advantage of it.

Called Direct Install, it’s also available from California’s other major utilities with a similar initiative offered through several New York State utilities. You can visit http://www.dsireusa.org to find out what incentives apply for small businesses in your state.

While the program may go by different names elsewhere and have various levels of costs associated with it, a call to your local utility should get the ball rolling. In San Diego, more than 2,000 sites have acquired state-of-the-art energy-efficient equipment before the end of the program’s first year. This includes the latest in energy-efficient lighting, refrigeration improvements, LED ‘open’ and ‘exit’ signs, and occupancy sensors.

It also includes something called vending misers, which are devices that make vending machines 50 percent more energy efficient by shutting off lights when no one is around and powering down refrigeration when the sodas are cold. According to the U.S. Environmental Protection Agency, a typical vending machine equipped with this technology and meeting its ENERGY STAR criteria could save your business in the neighborhood of 1,500 kWh per year compared to standard models.

Through SDG&E’s program in San Diego and Southern Orange County, offices, bar and grilles, churches, fitness centers, barber shops and more have become more energy efficient without the upfront costs.

Qualifying businesses get a free energy consultation provided by the utility’s contracted specialists. The contractors identify where less-efficient equipment can be replaced with more energy-efficient products to reduce your energy use, carbon footprint and electric bill – all at no cost to you! And they’ll work with you to identify a convenient time for the equipment installation – during regular business hours or after-hours to minimize any disruption to your business.

With businesses seeking savings everywhere they can, teaming up with your utility on programs such as these is a smart move.

Photo credit: usatech.com

Ted M. Reguly is the director of Customer Programs & Assistance at San Diego Gas & Electric (SDG&E) and previously served as director of the Smart Meter and Home Area Network initiatives for the utility. He oversees SDG&E’s energy efficiency, demand response and customer assistance programs. He is an active member of UtilityAMI, OpenAMI and the ZigBee Alliance, and also serves on the board of directions for the utility technology association, Utilimetrics.

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Even though it seems just about everyone and their mother has a cell phone in this day and age, the office phone still plays a pivotal role for many small businesses in allowing them to conduct daily business.

You see, without that phone to call clients, take incoming calls regarding products and/or services and more, many companies would have a hard time operating on a regular schedule.

With that being said, is your company’s business phone service in fact serving you to its fullest capability or are you feeling disconnected at times?

In the event your company’s phone system is not up to par, there are options for you in order to ring up better service.

Among the factors to consider are:

• Determine your needs – The most important facet is oftentimes the most obvious. Before you embark on the idea of possibly changing your company’s phone system, sit down and do a review of the present one. What does the present one offer you, what are you lacking, what are your employees saying about it, what are customers telling you, and how much are you paying for it? These are all areas to tackle before you consider another phone system for the business;
• Single or multiple lines – Depending on how big your business is, you need to examine and/or re-examine the setup, determining whether your employees require a single phone number that rings simultaneously on a number of devices or not;
• Add an option here and there – Company heads also need to determine if they want their employees having the ability to access such features as intercom abilities, videoconferencing and paging to name a few. Do you want your employees to have the option to integrate a customer relationship management (CRM) system along the way? If the answer to any of those options is yes, expect to pay more or look for a service that bundles a number of options together for businesses.

In breaking down the options a little more, here are some features you may want to consider as you look to phone accessories:

• Auto attendant – Essentially removes the receptionist by giving callers a list of options to route their call (“Press 2 to speak with somebody in marketing”). It also gives callers option to dial directly to their party’s extension;
• Conferencing Features – Permits a pair or more of extensions to join together to take part in a conversation. Typically, the default is two. For those businesses that require more than two, find out what the maximum number of participants allowed is;
• Voice Mail – Rather self-explanatory in it allows messages to be left for employees that are unavailable or on another line;
• Call Hold – This allows for the ability to put a call on hold while the user tends to other matters;
• Music on Hold- With this feature, your callers have something to listen to while they are holding. It can be music or a pre-recorded message advertising your business.

Whatever your company’s business phone system needs, be sure you are dialed into what best serves your office as far as reliability and price.

Photo credit: businessphonesystemsuk.co.uk

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