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Classified ads are one of the most inexpensive ways to
advertise your products or service. Unfortunately many people
misuse classified ads. They try to sell a product directly from
the ad. The best way to use a classified ad is as a two step
process.
1. You place a classified ad in your local newspaper/magazine.
The ad should be simple and straight to the point. It should
then direct readers to call a phone number of your answering
machine.
2. Your customer will dial the number where they will hear a
powerful sales message and at the end customers are directed to
send an order to the address you give on the tape or they can
leave their contact details.
An example of such classified ad would be:
“Double your mail order business’ profits. Incredible recorded
message tells secrets. Call 1234 5678 24hours or visit
www.yourcompany.com”
People read classified ads for a purpose. They are specifically
looking for products, services and information that appeals to
them.
The selection of words you use is the most important aspect of
classified ad copy. You need to choose precisely but don’t skimp
on words to save the cost in the ad.
The best way to prepare copy is to first write about your
products/services at length. List all the major benefits and
features. Choose a powerful heading that points out the most
significant aspect of your product. Follow up with a few words
or details and finish with a request to contact for more
information.
For more information about writing effective classified ads, you
may wish to download a free copy of “Classified Ads Secrets”
Ebook from:
http://www.web4business.com.au/ClassifiedAdSecrets.htm
Article
How to use your Accounts Payable to
your advantage
Accounts Payable may seem like a ho hum kind of subject
but it can be a minefield of mistakes. Opportunities to improve your
cashflow and profit abound in your Accounts Payable actions.
Accounts Payable is the ‘flip-side’ to
Accounts Receivable. As we discussed in an earlier article your
objective is to keep your cash in your bank
account for as long as possible. Let’s discuss some ways you
can achieve this objective.
Paying suppliers too much, too quickly
and wasting discounts.
If you don’t pay any attention to Accounts
Payable, you could be losing out on money and opportunities.
Suppliers do make mistakes on invoices. I remember a
supplier sending in an invoice that had a $5,000 mistake in it
and it wasn’t in my favour! It was discovered because we were
entering each line item of the invoices into an accounting
system and the total didn’t add up. We were able to advise the
supplier and quickly get a credit note for the mistake. I dread
to think what would have happened had we not been alert for
this. $5,000 was a lot of money back in 1993 (as it still is
today!)
Paying suppliers too quickly is a
common error made by many businesses. It’s tempting
when a supplier calls up to immediately get the boss to sign a
cheque and get them ‘off your back’. This could be a very
expensive reaction. If you analyse your average days payable
i.e. the number of days, on average, you take to pay your
suppliers, you may be amazed how much money can come back into
your bank account, if you can take the maximum credit terms. It
can be tens of thousands of dollars. This is valuable
working capital for your business.
Conversely, not paying suppliers on time
can be expensive too. If suppliers are willing to offer early
payments discounts, you could be missing out on valuable gross
profit (especially if they are suppliers of goods for sale). If
you have good Accounts Receivable procedures and get paid on
time, this should put you in a position to pay suppliers on time
and get those valuable early payment discounts. Again this can
mean tens of thousands onto your gross profit and
bottom line.
Not recognizing the value you provide to
suppliers and getting the best terms
It is so easy to keep going along with the
same supplier because you always have, and not realize the value
of the business you put their way. Most suppliers will not
alert you to better value items or offer you better terms, so
you have to keep a track of it yourself. The best way to do
this is by having a good system for tracking purchases.
That way, it’s easy for you to print out a report on how much
business you have done with a supplier over a period, and go
back to them to negotiate better terms or even approach an
alternative supplier. Obviously service levels are important
too, and if they are equal then the deciding factor could be the
credit terms from a supplier. Again this could
have the impact of tens of thousands of dollars into your bank
account of vital working capital.
Damaging your credit rating
Stringing out supplier payments with no
agreed terms or strategy can be very expensive in terms of your
credit rating. Most good suppliers will expect you to complete
a Credit Application, prior to doing business. If you can’t
provide good references, you may find it very difficult to get
credit. Also if you have had a judgment against your business
by a supplier, it could cause suppliers to give you a ‘wide
berth’. This can be very damaging to working capital if you
have to fund purchases with COD terms.
Not knowing what you owe, to whom and
for how long
If you don’t have a system for tracking
Accounts Payable then it’s very difficult to know your near and
far future obligations and cashflow position. If your business
is growing this could cause huge headaches. The last thing you
want is to be going to the bank ‘cap in hand’ because you have
run out of money. Banks see this type of approach as very
unattractive. If you can go to them well before the event, and
say “if this happens, I may need to borrow money, they will see
you as a much better bet, as you demonstrate you have your
‘finger on the pulse’ of your business.
Not understanding the impact of Accounts
Payable on Working Capital requirements
Working capital is a vital issue for every
business and Accounts Payable makes up a large part of working
capital i.e. the quicker you pay suppliers the higher your
working capital requirement will be.
Working capital is the amount of cash you
need to fund sales. If you offer credit terms to your customers
and keep stock lying around for a while the money tied up in
these items is working capital. Accounts payable adds to this
requirement, so if you are paying suppliers haphazardly you
could be ‘shooting yourself in the foot’ in regards to Working
Capital.
Sue Hirst
CAD Partners (CFO On-Call)
Pty Ltd
www.cadpartners.biz
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3. If consumers gave you permission to talk to them, would you have
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people about your products?
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And in numerous informative case studies, including American
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Till next time ... Ivana Katz
Websites 4 Small Business
www.web4business.com.au |
