Websites 4 Small Business Newsletter
15 April 2008

In this issue

Business Marketing Tips - Affiliate Programs
Article - 6 Steps to Avoid Bad Debt
What's Free - Google Maps
Recommended Reading - Ladies who Launch 
Business Tools - Wordtracker
Newsletter Archives - click here

Business Marketing Tips

Affiliate programs

Affiliate programs also known as reseller programs are an agreement in which a website owner displays an ad for another company in exchange for a commission on the resulting sales and/or leads.

There are two ways you can start your own affiliate program.

1. You can have a service bureau take care of nearly everything for you. They’ll handle the recruiting and administrative functions like sending out payments, tracking, reporting etc. A good example of a service bureau is clixGalore - http://www.web4business.com.au/clixgalore.htm

2. Set up an affiliate program yourself, using on-line services. Some you may wish to check out include:

www.web4business.com.au/clixgalore.htm
http://www.web4business.com.au/Clickbank.htm
www.synergyx.com 
www.marketerschoice.com 
www.assoctrac.com 

Tips for setting up successful affiliate programs:

1. Should be free to join.

2. Offer real time statistics so that affiliates can check their sales and commission without having to contact you.

3. You should provide your affiliates with proven tools they can use to sell your products (eg. Sales letters, endorsement letters, banners, ezine articles, ezine ads)

4. Technical support 24/7

5. Stay in touch with your affiliates to keep them motivated

6. Give your affiliates the highest commission you can.


Article

6 Steps to Avoid Bad Debts

How well you do your debt collection can make or break your business. Every business has different methods and issues … so let’s look at some of the key factors in running a successful Debt Collection process in a typical business. By typical business, I mean one that offers credit terms to its customers and sends out invoices.

Here are the six (6) steps:

1. The When and How of Sending Invoices?
2. Giving Customers Options to Pay.
3. Terms of (Business) Trade and Credit
4. Statements/Reminders – Why Every Week if Necessary!
5. Debt Collection/Recovery
6. A Small Investment in Debt Management …


1. The When and How of Sending Invoices?

When you do your invoices can have a huge impact on your cash position. You may be staggered to hear that one business owner advised me he sends out his invoices when he runs out of money! This is not untypical of many small businesses who struggle to manage the paperwork. It’s easy to get sidetracked with sales, marketing and delivering a product or service and fail to collect payment. This is probably the single biggest culprit in business failure.

If you don’t keep the working capital coming in, you quickly struggle to run other aspects of the business, like paying suppliers and your staff etc. If you can get a systematic programme for invoicing, you are well on the way to good financial management. The sooner you can invoice your customers, the less money you need to find from elsewhere, such as bank loans or equity loans to cover running costs.

How you do your invoicing is as important as when.

If it’s hand written, on scrappy stained paper, it is likely to be treated casually by customers. If it looks professional and contains all the required details, it is more likely to be treated seriously. One of the most important details to be contained on any invoice is the Credit Terms i.e. how many days the customer has to pay the invoice. You would be amazed how many businesses omit this from their invoices, even some very high profile organisations who should know better! The problem with not detailing credit terms is that customers will make up their own! They will decide to pay you when they feel like it … or when they can. Other suppliers, who have put credit terms on their invoices, are likely to get paid before you, so give yourself a head start by putting terms on your invoices.

2. Giving Customers Options to Pay.

Giving your customers as many methods of payment as possible, is a sure fire way of increasing the speed and your chance of getting paid. Not all customers work the same way. Some people still like to write cheques, some like to pay by internet banking, some like to pay by credit card. Credit card merchant fees can be expensive, but not as expensive as waiting 60 or 90 days for someone to get round to writing a cheque. We live in an age where there are so many methods of payment available, so why not utilize them all to ensure you get paid, one way or another.

3. Terms of (Business) Trade and Credit

It’s interesting how many businesses get excited about their product or service and completely forget about the importance of getting paid. Getting paid is the first thing you should think about in any business. This means you need to ensure your customers understand how much, when and how they should pay you. The best way to achieve this is to have a simple ‘Terms of Trade’ or ‘Terms of Business’ document. This can be given to the customer when you are going through the sales process or emailed at any time. That way there can be no excuses for non or late payment. A good ‘Terms of Trade’ document should also contain a clause about ownership of any goods until they are paid for. Such a clause can save a business from financial ruin where a big customer goes into liquidation holding onto unpaid stock. If you have an ownership clause, you may have the right to retrieve goods unpaid for.

Credit Checks are a really good way to deal with potential bad debtors. If a customer can’t give you at least three credit references, perhaps you may be better off avoiding them. No sale could be better than a bad debt, as you don’t incur the cost of delivering the goods or services as well as the loss of payment.

The Quick & Easy way to See Who Owes What

Once you have sent out invoices and they have terms on them, it doesn’t automatically follow that customers will do the ‘right thing’ and pay on time. You need to be able to easily monitor what is owed to you, by whom and for how long. A very simple report that you can get from MYOB and other systems, lists all those customers who owe you money, how much they owe and has columns for how long they have owed the money. This gives you a very quick and easy way to see where you should be concentrating your debt collection efforts. The more often you can look at such a report, the better your cash position will be, if you use this report as a basis for your debt collection.

4. Statements/Reminders – Why Every Week if Necessary!

As mentioned above, sending out invoices and letting customers know the terms, doesn’t guarantee you will get paid on time. You need to let customers know you are serious about getting paid. The best way to do this is to send out regular statements. Statements not only remind customers it’s time to pay, but let them know you are ‘on top’ of the situation in relation to outstanding debts. If unscrupulous debtors get the impression you aren’t organized about debt collection they can take advantage of the situation. Put yourself in a debtor’s shoes or the shoes of their Accounts Payable person. They get all kinds of invoices coming via mail and email. Which ones are they going to pay first? Those who seem disorganized with shoddy practices or those who appear professional and serious about debt collection. All good accounting software has the ability to produce statements. You can send them whichever way you prefer ... be it mail or email. You can be sure though that the suppliers who remind customers about payment are going to get paid ahead of those who don’t.

5. Debt Collection/Recovery

It’s interesting how many business owners write off perfectly recoverable debts*. For some reason they feel it’s not worth the effort to employ a debt collection/recovery agency to collect the debt for them. If you have exhausted all efforts to get paid by a customer I can highly recommend employing the services of a good debt collection agency. At this stage you may not want to do any more business with the customer so getting tough should not be a problem. Any good debt collection agency though, should perform their task without you having to lose a customer. Some use poor tactics that can sour the relationship, but there are good ones around who understand the importance of maintaining good customer relations. You should not hesitate to employ a debt collection agency, as you should have the right to charge your customers the costs, if you have included this in your ‘Terms of Trade’.

6. A Small Investment in Debt Management …

… can save you heaps later! All of the above will happen if one person is allocated the responsibility for Debt Management. They may not have to perform all of the tasks but if one person is responsible to oversee the process … it’s more likely to get done properly. It may seem like a large expense but the cost of not managing debt collection can be very high, in terms of lost working capital and accumulating bad debts.

CAD Partners (CFO On-Call) can advise you on all of the above and more to ensure your precious working capital spends more time in your bank account, than that of your customers. Feel free to call us on 1300 36 24 36 for a no obligation discussion about implementing an effective Debt Collection System.

There is a FREE e-book on Cashflow control available to subscribers of this magazine. To get your copy go to http://www.cadpartners.biz/subscribenewsletter.php
 

What's Free

Google Maps

Google Maps are dynamic, interactive maps that you can drag (no clicking and waiting each time you want to view the adjacent parts of a map). Type in the name of a region or neighborhood and see any part of it as easily as with a regular street map.

Depending on your location, you can use Google Maps to search for businesses within an area or neighborhood. You can also create personalized, annotated, customized maps, complete with placemarks, lines or shapes. Add additional content including rich text, photos, videos and then share your map with others or open it in Google Earth.

http://maps.google.com/maps 

Recommended Reading

Ladies Who Launch: Embracing Entrepreneurship & Creativity as a Lifestyle

If you want to pop the lid off anything you ever thought you couldn't do, shouldn't have, or couldn't achieve, this is the book for you.  All the tools you need to ignite a fire under a long-smoldering dream or catapult a lifestyle, relationship or career to a higher level are right there.  Women tend to think of dreams as bigger than themselves, pies in the sky; morsels of imagination saved for  a rainy day - in other words, out of reach.  Well, guess what? Ladies Who Launch will reprogram how you think about your dreams so that they are as real as the coffee you drink each morning.  They're real and they're all yours!  To be truly happy and inspired by the life you're living, you can take steps to wake up and launch your dreams right now.  It is time to start believing that you can have what you really want.

To order this book in Australia, click here
To order this book in USA, click here

Business Tools

Wordtracker

People use different words when they search for your products online. Use these 'keywords' in your website copy and people will find your site when they search.  No matter what business you are in, Wordtracker will tell you the words people use when they search - and how popular each word is.

With a Wordtracker subscription, you will be able to optimize your website content by using the most popular keywords for your product and services, generate thousands of relevant keywords to improve your organic and PPC search campaigns, research online markets, find niche opportunities and exploit them before your competitors. In short, your search engine ranking will soar, you'll get more visits to your website and more people will buy your products.

More info

Till next time ...

Ivana Katz
Websites 4 Small Business
www.web4business.com.au