If you raise an invoice, collect the money! (April 25th, 2015)

Australian currency isolated against a white background

Cash flow, or the lack of it, is an issue that impacts heavily on many small business owners and in a lot of cases, could well be the reason that so many of us get stressed or lose sleep at night.

At one time, I personally could have been accused and found guilty of being a bit soft on people who owed me money. I fell for that notion that said I shouldn’t chase money too hard in case I might lose a customer. I reasoned that a customer is everything and even if they paid horrendously slow, I couldn’t afford to lose any.

I followed that thinking for a long time but not any longer, I have since learned that some customers just aren’t worth having and it’s better to let them go. I have also developed a very different approach to collecting money that is owed to me and I’d have to say, doing something that I once thought could be detrimental to my business has proved to be the exact opposite, very beneficial.

Some years ago at a time when NSW was in severe drought, I was asked to participate in a number of Drought Seminars to be held in towns around the west of the State. My role was to present a talk on marketing while there was also an accountant there who was asked to speak on financial matters.

One of the things the accountant hammered home to those who attended was this “if you raise an invoice, collect the money”.

This lady explained in no uncertain terms that when you deliver a service or supply a product, you deserve to get paid, and in a timely manner. Put simply, she said “if you raise an invoice, collect the money”.

She went on to explain that “it’s your money” and you’re perfectly entitled to ask for it.

At this point I won’t go into all the different ways that business people reason that they should treat their debtors, I’m sure you can review your procedures for yourself. What I would like to do is tell you what I do and let you consider if anything I’m doing might help you get paid quicker.

I’ll try to keep things reasonably brief and let you fill in the blanks. If you need further information or would like to hear viewpoints from other members, please use the contact us facility and we’ll include it in our Brain’s Trust.

The best way I’ve found to get paid sooner rather than later is to be regular and consistent and to always do what you say.

Our procedure is this –

We offer 30 day accounts to appropriate customers. (Because we operate in a regional centre and have a reasonable knowledge of the local business community, we don’t generally do formal credit checks but tend to size people up on face value and then follow our gut feeling. As silly as this may sound, in our case we have an excellent track record.)
If we have any doubts or believe that to proceed with caution is the best way forward, we ask for payment with the order.

We send invoices and statements out at the end of the month. About 75% are emailed, the remainder posted.

If an account remains unpaid at the end of the 30 days, apart from noting the next statement as overdue, we ring the customer within 7 days asking for payment. My accounts lady makes these calls.

We repeat this each week until paid and have no qualms about making a nuisance of our self. Until an account has been paid by the customer, we have, in essence, made no sale and no profit.

This process also generally gives us an indication of any potential problems. Talking to people person to person also gives you a feel for not just what they are saying, but what they are meaning, if something else like simply telling porkies.

We consider each case on its merits and depending on the vibes my accounts lady is getting, I may then get involved. I may email the customer or ring them depending on what I consider appropriate. Sometimes just my saying the account has landed on my (the boss’s) desk and I’m concerned gets the job done but from this point on I do whatever I believe it will take to get paid. I too have become quite adept at making judgements about whether what people tell me can be believed and trusted or whether it’s just lies.

What I have learned in all this is –

1) Good people will generally not want to flag the fact that they are unreliable or can’t be trusted. They may stall and pussyfoot around a bit but we generally get to the point where, unless they pay, they run the risk of showing themself to be something other than honest and reliable.

2) Bad payers will string you out as long as they can so the more you “bother” them, the sooner you’ll get paid.

3) Nothing beats getting on the phone to the customer or right in their face. You’ll likely get to the point where they’ll pay your account because they simply don’t want to hear from you…again!

4) By doing this regularly and consistently, your customers will know what’s coming and pay you ahead of others just to keep you off their back.

5) A customer who does not acknowledge and appreciate your right to ask for your account to be paid in a timely manner is a customer you may not want. Sooner or later their true colours may show up and the cost to you may be far greater than you imagined.

6) I haven’t used a debt collector or gone down legal channels to get paid for years. My experience, when I have done that in the past (because that was what you did??), has been anything but satisfying. The cost, frustration and any outcome using that method, I just found it to be something I wasn’t comfortable with and beside, the methods I use today have proved to be far more fruitful and feel more noble.

On a broader note and with this experience added to may others, my policy now is to always try to deal with GOOD people, be they a customer of mine or me as a customer of theirs. My theory and experience is that you can always work things out, no matter how bad the situation is, with a good person.

Australian Small Business Commissioner (20th April 2015)

Just recently I was contacted by the Australian Small Business Commissioner’s office about an editorial comment I wrote for our newspaper a few months earlier. They liked the article and wanted to invite me to contribute to their blog occasionally.


I never knew it existed and still don’t know much about what they do. The feeling I get however, is that they are genuinely interested in helping small business owners and to help them do this, they want to hear firsthand about the issues that small business owners have to contend with on a daily basis. My item is yet to appear on their blog and it seems that most of the current contributions have been provided by industry people who work with small business owners.

I believe they’d like to receive some more candid feedback from genuine business owners but either way, you might like to have a look at their sites and decide for yourself whether there’s any value in what they do for you personally. I’m going to watch their progress for a bit to see if anything worthwhile comes out of it.

The sites you need to check out are –





There’s branding and there’s branding (20th April 2015)


One of the buzz words that media sales people like to bandy around a lot is “branding”.

Branding your business is simply marketing it in such a way that it will easily or quickly come to mind when people are looking for what you offer.

It’s a very valid thing to do and when done right will help your business grow. I strongly encourage you to do things in and around your business that will lift your profile, but like most things there are right ways and wrong ways to go about it.

For this item, I want to warn you about entering into certain long term advertising contracts with media outlets. The type of contract I’m talking about will usually use the word “branding” quite heavily in their sales pitch and is often presented to you through a business workshop or seminar that has been arranged by the media outlet. One of these that I’m aware of is actually called “Brandworks”, but it doesn’t matter what the title is, if a media outlet invites you along to some sort of talk or presentation about growing your business, you can be reasonably sure that they are trying to sell you an advertising package that will likely tie you up with them for a year.

Newspapers, radio stations and television stations have been doing this for many years and it reels in tens and tens of thousands of dollars each year for the media involved. The spirit of what they set out to do is fine and the deals they offer are often packaged up in such a way that they can sound unbelievable value but in my experience, better outcomes can often be achieved spending less money more wisely. Such packages can be restrictive and often lock you into one media or one media company. I believe having flexibility and using a media mix gives you far better options. If you’re not locked into a contract, you’re also better placed to change direction if the market warrants it and to take up any deals of opportunities that the media might throw up. You may still be able to do this but if a large proportion of your advertising budget is tied up in a long term contract, it may not be as easy to find extra money when you need to.

So….my advice in cases like this is to go along to any meeting that sounds like this, listen to the advice and take it on board, it’s usually very sound and helpful. However, when the sales people are waving a contract under your nose and strongly pushing you to sign it, tell them you’d like to think about it for a week or so. Then go home, think about what you learned and then consider what they offered you and whether you think you can achieve better outcomes doing similar things but by using other and possibly better and cheaper methods.

One finally thought –

Media salespeople, especially radio and television reps, are very adept at dazzling you with numbers. They can package up advertising space in such a way that it can seem like they’re almost giving it away. Usually however, it’s a mix of good and bad and the trick is to discard the bad or even very bad. For example, any radio or television spots between say 11pm and 6am have far less value than say spots during the afternoon and far less again than say television prime time spots between 6pm and 11pm or prime time radio spots between 7am and 9am. Let me remind you, when you’re buying advertising space, you’re buying an audience and the cost of the space needs to be appropriate to the likely audience. (see The price is not always right in Advertising Know-how April 15, 2015)

The price is not always right

Someone once told my wife that when buying clothes, she should not worry so much about how much a dress or outfit costs but rather, she should consider the “cost per wear” factor.

In other words, buying a dress for $100 just to fit a budget and that’s not quite right for you, will probably spend more time hanging in your wardrobe than hanging on you. On the other hand if you forget the budget and buy a dress that’s perfect you, you’ll probably wear it over and over again.

A $100 dress that you wear 5 times will cost you $20 per wear but a dress you pay $200 for and wear 20 times will cost you $10 per wear. I’m sure you get the point.

It’s similar when buying advertising. Many business people are more interested in buying ads at the lowest price rather than at the best value.

What they often don’t understand is they’re not buying an ad or ads, they’re buying an audience.

Put simply, if you buy a $200 ad in a newspaper with a circulation of 10,000 copies just because the alternative newspaper wanted to charge you $270, it doesn’t make a lot of sense if the circulation of the alternative newspaper is 18,000.

In the same way, it’s better to buy a TV ad in a Prime time program for say $300 rather than in an off peak program for $60, if the audience for the Prime time program is known to be 10 times as many as the off peak program.

Just like a woman might consider the cost per wear factor when buying a dress, you should consider the cost per 1000 factor when buying an ad. By that I mean, how much does the ad cost to appear in each 1000 newspapers or to reach each 1000 people in the audience?

In the examples above it works like this –

A $200 ad in a newspaper with a circulation of 10,000 means it costs $20 per 1000 copies.

A $270 ad in a newspaper with a circulation of 18,000 means it costs $15 per 1000 copies.

A $60 TV ad in a program with 30,000 viewers means it costs $2 per 1000 viewers.

A $300 TV ad in a program with 300,000 viewers means it costs $1 per 1000 viewers.

In basic terms, you can see that in both cases, the lowest cost does not represent the best value.

The message to take out of this is, when buying ads, don’t look only at the price, look also at the audience numbers and consider the cost per 1000 comparisons. The more people you can reach with your ads at the lowest cost per 1000, the better your chances for more sales or customers and that means more profits.


Time means money

Posted on April 8, 2015 by Bob Holland

In my (newspaper) business, the biggest expense is wages and as the media business gets harder, I’m always looking for ways not to overspend in this area.

About 12 months ago when I was looking at areas where I could reduce my costs, I realised that I was paying my staff for 38 hours work a week when in actual fact they were only working 37 and a half. Our office hours were 8.45 to 5.15 Monday to Friday with an hour for lunch each day.

At the time I had about 12 full time staff so I was in effect paying 6 hours a week for nothing. At just $20 an hour this works out at $120 a week or over $6000 a year. Of course that’s crazy but until I started to really think about it, I hadn’t realised how silly this waste of money was.

During this thought process, I also wondered why we couldn’t just operate from 9 till 5 with the same hour for lunch. Then I thought about the implications of changing our working hours and the way I paid my staff from 38 hours full time to 35 hours permanent part time.

That was about 12 months ago and today most of my staff work and get paid for 35 hours a week. I made some agreed concessions with those staff who were there during the changeover but as staff left I replaced them with permanent part time employees who work 35 hours per week.

The end result has been that my staff now work 35 hours a week, they get paid 35/38ths of a full time wage and effectively work 150 or so less hours each year, the equivalent of about 4 weeks work.

I’ll let you do the numbers and read between the lines but in my business, we aren’t disadvantaged in any way by working a 35 hour week and my overall wages bill each year is around $50,000 less than if we worked a 37 and a half or even a 38 hour week. My staff all appear very happy with this arrangement and when I’ve advertised for new staff, not one applicant has ever raised any issues with the 35 hours part time arrangement.

Of course, for some businesses a 35 hour week may mean loss of income or turnover but I’ll let you work that out as it applies to your business.


Cheap but QUALITY PRINTING (22nd March 2015)

Even in this modern electronic age, most businesses have need of a printer from time to time. My work has seen me use more than my fair share of printers over many years and during that time techniques and efficiencies have improved dramatically. Traditional ink printing machines still have their place but in many cases have been replaced by photocopiers that can do a whole lot more than just print paper.

The result of all this is that today, there are printers who are geared up to such an extent, that they can produce many of the commonly needed printed materials that businesses need for a fraction of the cost that other printers may charge. They also offer excellent and easy to navigate online facilities that make it easy to get a quote and then place an order if needed. They also have first class delivery procedures in place.

Two that I’ve used over many years and would happily recommend are the following:



They are both highly cost effective on most items but I have found the cost to print booklets and large scale posters with them among the best value.