Granting Credit: Think Like a Bank

Granting Credit: Think Like a Bank

The first step in thinking like a bank is to act like a banker.  The bank does not perform a service, does not manufacture a good for sale, the bank essentially does nothing but loan money, for a fee.  In today’s LA Times, April 1, 2018, in the classified section I noticed an ad for a husband and wife team loaning money in LA County for real estate deals.  This couple was acting like a bank.  I recently bought my…

Read More Read More

USING CREDIT TO INCREASE SALES

USING CREDIT TO INCREASE SALES

Increasing sales during a recession is no easy task.  Federal Express started in a recession, so it is more than possible.  The key is being able to provide your existing customers, as well as new, potential customers with the credit their business or household will require to purchase your goods and services.  Sears was a master at giving everyone credit, using small monthly payments, while expanding credit limits, thereby increasing sales. Store credit is not uncommon, and becomes an absolute…

Read More Read More

How Easy Is It for Your Customers to Pay You?

How Easy Is It for Your Customers to Pay You?

I recently received a bill from a Pediatric Surgery Group. My kids are grown with their own insurance. I had no clue what the bill meant. I called the number on the bill, and learned the bill was indeed for me. The group does all sorts of work, but bills everything under Pediatric Surgery. How confusing! In another instance, my doctor is part of a large group associated with a hospital. If he sends me for tests, tests are done…

Read More Read More

When Small Business Owners Do Not Get Paid

When Small Business Owners Do Not Get Paid

“Trusting someone is my decision. Proving me wrong is their choice” – Unknown There is no denying that every business relationship involves a good deal of trust, and also no denying that when the business relationship is compromised, there is a betrayal of that trust. One of the most common ways a business agreement is violated is nonpayment. Nonpayment for any service or product is never a good thing. But for a small business owner, the consequences go much deeper…

Read More Read More

Credit Decisions: Think like a Bank Part Two: Decision Making

Credit Decisions: Think like a Bank Part Two: Decision Making

When you grant credit, you are essentially making a loan. We urge small business owners to protect their bottom line by doing the sort of things banks do when they loan money. We break down the small business credit cycle into four stages: application, decision-making, implementation and management. You can read more about step one, application here . This article will focus on the second step, decision making. Simply put, you should not grant everyone credit. Also, everyone should not receive…

Read More Read More

Credit Decisions: Think like a Bank (Part 1: Credit Application)

Credit Decisions: Think like a Bank (Part 1: Credit Application)

Offering credit terms to customers can grow sales, but giving too much credit to the wrong businesses can hurt cash flow.  Small businesses owners should take example from their banking institution, which is in the business of granting credit. When a bank makes a business loan or offers a line of credit, they make a careful determination of the risks involved and the ability of the borrower to repay. Most small business owners do not want to invest in services…

Read More Read More

Bad Debt and Small Business: The Donald Trump Lesson

Bad Debt and Small Business: The Donald Trump Lesson

Let me start off by stating that this article is not a political piece, and does not infer support or lack thereof for any 2016 Presidential candidate. However, I was struck recently by the story of a paint store owner who successfully sued one of Donald Trump’s companies.  .To summarize, small business owner Juan Carlos Enriquez of the Paint Spot in Doral, Florida sued over not receiving the final payment of his contract. He knew that taking on a Trump…

Read More Read More

My Mantra: You Have the Right to be Paid

My Mantra: You Have the Right to be Paid

I love working with small business owners. When they do not get paid, it makes me feel terrible. I am passionate about the right of small business owners to get paid for the work they do. Wiith the right to be paid also comes the responsibility to do the kinds of things that will ensure prompt payment. All too often small business owners and entrepreneurs give away their right by not accepting that responsibility. That is where I come in….

Read More Read More