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What's New At Credit Matters?

What's New At Credit Matters?

Welcome to our October newsletter. The focus this month is on the changes around our business environment.

Our quote this month is by Aldous Huxley, "Reality cannot be ignored except as a price; and the longer the ignorance is persisted in, the higher and more terrible price that must be paid."

The blog focusses on today’s business environment when the financial viability of so many businesses at stake. It is incumbent on all business owners and managers therefore to regularly make strategic and often very emotive decisions. In these difficult times, our decisions need to be made much earlier than ever before when considering the overall welfare and viability of our businesses.

The conundrum is about the cost and benefits of visiting your customers as it is another way of identifying your customers’ status, and your competition which sells to them.

The inconvenient truth is about finding quality employees and one method for finding the right type of employee is at your local sporting club.

The Special Topic is about “brand warmth” from the credit and sales perspective for your business.

Kim is available to help with your questions and concerns if you need any assistance, and as always, the first chat is always free of charge or obligation.

Quote Of The Month

Quote Of The Month

“Reality cannot be ignored except as a price; and the longer the ignorance is persisted in, the higher and more terrible price that must be paid.” Aldous Huxley.

Monthly Business Observation

Monthly Business Observation

The reality is that today we are all working and living in difficult times. The ramifications and outcomes for your business and personal financial and emotional welfare could be negatively compromised as a result. On the other hand, these factors could just be the trigger you need to do very well if you have been acting on the movements in the business environment which have been evident for some time.

For instance, there are many sellers of the story that “…cash in bank accounts and that this cash is lazy, or of not great value to the business.” These stories have been around for some time. As you may be aware, my messages suggest otherwise. The reality is that the sellers of these messages are often really just after your cash, or the messengers are trying to sell a message with an outcome geared for their own personal needs.

On the other hand, my messages have been that cash in the bank, provides financial and emotional safety which are essential components in our business and personal lives. After all, if you have the cash, you:

  1. have financial and emotional control over your business and personal futures,
  2. do not have to waste time seeking debt financing, which can be refused after spending time filling in forms and answering all sorts of questions,
  3. can negotiate the buying of assets and services for a discount from a position of strength,
  4. do not have to waste time completing finance applications that may mean you miss out on a special deal to another party with the cash,
  5. can purchase what you need immediately and get on with doing business immediately, etc.

On the other hand, when you don’t have the cash for your needs, any time and effort spent as you seek funding, often negatively compromises your ability to achieve other objectives. In effect, you are actually missing working other business activities and earning a dollar.

In addition, if you ignore the reality that your business is not travelling well enough to pay its bills as they fall due, your financial, reputation and problems suffer additional costs. As many businesspeople, directors and managers are now finding, when this becomes evident, there is a constant attack on their financial, time and emotional resources.

Furthermore, we are yet to see any mention on the possible negativity ramifications to the people in the above situations in their future. It is more than likely any future aspirations are going to be negatively affected if they closed a current business down owing the ATO and other creditors substantial funds. Unfortunately, we are yet to see the acknowledgement of these negative outcomes from people who may wish to restart their business, or professional and personal objectives in the future. Stories on these situations will likely be forthcoming in the years ahead.

The reality is that in these troubled times, two main factors stand out. Cash in the bank equals emotional and financial freedom. If you don't have the cash in your bank account, you are going to also miss many profitable business opportunities. The second factor is that if your business closes down and does not pay the ATO and creditors due to a lack of funds, you will find your future business and personal aspirations negatively compromised.

Monthly Business Conundrum

Too often today, businesses are content to sell their products and services via telephone, call centres, email or via their website and the internet. In addition, there is also the concept that some small-dollar customers aren’t worth visiting at all and spam like email campaigns will be effective. Sadly, such philosophies also apply to credit managers and other staff, and they too are not encouraged to leave the office and liaise face to face with their customers.

The concept behind such thinking is that these approaches are less expensive than site visits, or even networking events, which are deemed to rarely lead to a satisfactory return on the time and cost invested. There is some truth to this concept, and the reality is that on a day-to-day basis, and with the “effective” use of technology, there is often no need to visit other than occasionally.

The fact is however that so much valuable information is never identified by not visiting every customer occasionally. Your conundrum therefore is to find a way forward so that valuable business information is not missed.

As an example of the type of information which may not be noticed includes, but not limited to:

  1. the current state and size of the customer’s business,
  2. the environment surrounding the business may have changed either for the worse or the better,
  3. identify whether the business ownership has changed and your trading agreements are now invalid,
  4. identify the names and employees which may have changed since initially noted,
  5. finding out whether competitors have taken advantage of your prices and/or have stocked superior quality products or initiated new sales incentives,
  6. locating whether your stock has been relegated to an unsaleable position in the store,
  7. identifying whether your customer service, billing or product range can be improved to increase sales, etc.

Customer service, knowing your customers and their needs or opportunities, identifying your competitors and their offerings are all part of maximising the dollar profit from every sale, and from every customer on your books. Finding out whether there are new customers in the immediate vicinity of your existing customers is another possible source of business.

None of this is possible when you do not try to visit every customer within a reasonable timeframe commensurate with the sales potential of that customer. Your customers want to see a person and a face that they can relate to and feel safe in making business suggestions, or taking up issues which may be causing problems. After all, people do business with people, not just telephone calls or emails.

Monthly Business Conundrum
This Month's Business Inconvenient Truth

This Month's Business Inconvenient Truth

I was talking with another finance professional recently and the topic was about finding quality people and potential employees for our respective businesses. One point we agreed upon was, that our local sporting clubs were an ideal source of such people.

After all, when you think about it, the people who do all the work on the committees of these clubs, the volunteers, and the club sponsors, are working as a team. Then of course, you also have the players, coaches, and sporting staff within these clubs plus the players, particularly the younger ones. You can soon see from the players’ attitudes which of those who are willing to do the hard work, learn about different aspects of their game and value a team approach to achieve a common goal.

Within these groups, you can find a potential experienced performer for your business or a younger person which can be educated to your business ideals and processes. The evidence and value these people can bring to your business are that they have shown a wiliness to work to a common goal. They can also be educated to work to a different set of conditions and processes and do not seem adverse, to working hard for the right goal(s).

The caveat to the above is that you need to provide an appropriate work environment, remuneration, learning opportunities and a chance to contribute ideas and ask questions in a safe environment. If you can provide such an environment, you will have an opportunity to keep them incentivised to achieving the end goal of success for all parties within the business.

There appears to be more emphasis on the value of the term “brand warmth” these days. It is important to recognise how important this concept is in the sales to payment process.

Credit Matters is a financial risk management resource centre for the Australian business community. If you are in business, Credit Matters is your ideal source of financial risk management solutions.

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Future Opportunities & Possibilities

Credit Matters is continuing to grow and provide marketing and knowledge about financial risks to the Australia business community.

Futhermore, we invite marketing and knowledge ideas from our readers and contributors on how we can assist our respective firms grow. If you have any ideas, please contact me at info@creditmatters.com.au.

If you are interested in finding new ways to reach your marketplace, why not try Credit Matters. Our prices for advertising are very reasonable and advertising packages are on offer to make any cost, even more affordable. So if you are interested in reaching your customers at the right price, please contact Kim at info@creditmatters.com.au for options.