Relationship Between Invoice Date & Cash Flow
In our sales invoice basics post we talked about keeping on top of your invoicing to improve cash flow. Today we are going to give you a very simplified demonstration of how when you invoice affects your cash flow and how much capital you need to keep a float until you get paid. This demonstation would not affect those of you who get paid 100 percent up front. This does affect those who get a deposit up front and those who do not get paid until the end of the job (not a great situation for various reasons but that’s another post).
Right click the image above and open in another tab or browser window to follow along.
Note: These samples assume the customer has the traditional 30 days to pay your invoice. Everything gets extended if you let them be slow payers. Obviously, if you offer a discount for early payment and they take advantage of this everything gets shortened.
The days nothing happens in the demos have been hidden to create the image. If you build your own cash flow chart there would be days in between invoicing and payment dates where you have to pay something yourself.
For projects where you had to buy products or services this will add into the equation. For simplicity sake we made the date you purchased the materials/services a few days before you complete and assumed you yourself have 30 days to pay your account. Adjust the timeline as needed if you have to purchase things further in advance of completion or had to pay cash instead of on account, which of course adds to the time you have to carry the costs of the project.
Bill as Soon as You Complete the Job
Our first sample shows what happens if you bill your job the day it is complete.
In our simple example of billing on the day of completion you end up waiting 5 days between paying your suppliers and you receiving your money from the customer (if they pay on time).
In this scenario you would need 4 days of additional cash to keep going if you have bills to pay within those 5 days.
Bill on the 15th of the Month
If you stock pile your invoicing and do it all on the 15th of the month then you have to finance your supplier costs 11 days until you receive your payment (again assuming the customer pays on time).
Bill on the 30th of the Month
You procrastinator you! You stock pile all your invoicing until the last couple of days of the month. This creates a very stressful situation for yourself plus adds time to how long you have to finance your business.
In the wait ’til the end of the month scenario you end up having to finance your business 14 days until you get paid.
Multiply This by the Number of Projects You Have
The Bad
When you are the procrastinator type (waiting until the 15th or end of the month) your financing woes get greater and greater. The number of things you have to pay for prior to collecting your money just pile up.
The Better
In the bill as you complete scenario, eventually, you could have money coming in every day! Quite possible if your business takes on smaller projects where you could complete within a day or two. The key to this is having a backlog of work (a line up of work) waiting.
Don’t Wait to Bill
If you want less worries about financing your business bill as you complete. Get in the habit of setting aside time each day to do your invoicing. Remember, some will pay in advance of the 30 day deadline to get their discount which in turn shortens your financing problems.
Some Businesses You are Stuck with Other’s Schedule
In some businesses even if you adopt the bill as you complete habit they have set dates they process bills for their jobs hence there needs to be an adjustment in your own financing plans so you do not get in trouble with your own suppliers.
An example of having to live with someone else’s schedule would be construction contracting on larger projects. Here where I am, on larger jobs all invoicing has to be submitted by the 25th of the month. The architect on the job looks over the subcontractor bills, approves (or adjusts them), submits to the project owner, project owner submits payment to the general contractor who then has to payout to the contractors (less 10% holdback). The owner usually is to pay the contractor on the 10th of the month following but you still have to wait for the contractor’s accounting department issue your cheque. Vary the timetable as applicable to your situation.
You Get Paid When I Get Paid
“You get paid when I get paid” attitude is a very good way to loose your good suppliers and contractors. It is just not good business to snowball your poor financial planning back onto your suppliers and contractors. This practice would be an unacceptable payment plan if you were on the receiving end of this attitude now wouldn’t it. If a customer did this to you you would reconsider doing business with them or raising your pricing to cover the lateness would you not? Well, you should, just as your suppliers and contractors will do to you.
Earn Better Credit Rating with Prompt Payment
When you have a good cash flow you can pay your bills on time (just like your home life) which in turn boosts your credit rating. As a business starting out you pretty well have no credit rating for the business, you have to go on your own personal credit rating when asking for credit accounts or credit cards. As your business evolves your suppliers will be willing to extend your credit account if you are good at paying on time or even early, just like your home life.
Parallels Between Business Cash Flow and Home Life Cash Flow
There are many parallels between cash flow for a business and your own home financing. Look at the examples again. Your home finances depend on when you get your pay check and thus you can pay your bills on time. Same with a business. Cash in the bank equates to paying your bills on time, being able to take advantage of early payment discounts and building your business’ credibility.
Stop procrastinating. Get in the habit of invoicing as soon as you can to improve your business cash flow.
Anyone got some suggestions on how they keep things organized so they can keep the cash flowing into their business continually?
Cash Flow Related Articles
- The Biggest Problem With Cash Flow Management
- 5 Ways to Protect Your Cash Flow – Cash Flow Management Tips to Keep Your Cash Flow Flowing
Learn Purchase Order Basics
In our last article about sales invoice basics we mentioned purchase orders. Today we are going to explain purchase orders and how they can help keep things under control from both a supplier’s point of view and a buyer’s point of view. This probably falls into the “Yuk, more paperwork” department for some of you but bear with me and learn the advantages of using purchase orders. Think big, even if you are a one person operation right now.
What is a Purchase Order?
A purchase order is a legal agreement between a buyer and a seller. You as the buyer order materials or services and agree to pay for what is included in the purchase order once the seller provides said materials or services. As a seller, once you start processing the order you have accepted the buyer’s offer to buy.
Because this is a legal document every thing needs to be clear as to what is being purchased, where it is to be delivered and what the price is. As a seller, if any of the information contained in the purchase order is incorrect you need to get it straightened out before processing the order.
Any changes to the order need to be documented and should be confirmed by both parties.
A purchase order is also known as a P.O. or P.O. number so when you see this box on an online ordering system they are referring to a purchase order.
Purchase Order Template
A purchase order template looks much the same as an invoice.
The top of your purchase order should contain:
Buyer Contact Information
Buyer contact information would include the following and is usually at the top of the purchase order laid out similar to a letterhead:
- Buyer’s name
- Buyer’s mailing address
- Buyer’s phone, fax and email addresses
- Buyer’s website address. Doesn’t hurt to include this. It has the potential of you getting a referral if the supplier gets a request of “Do you know someone who ….” (fill in what you do).
Purchase Order Number (PO Number)
The purchase order number is a reference point for both the buyer and seller. PO numbers are issued sequentially. Be sure to change the number if you are creating purchase orders in a word processor or spreadsheet template.
Have the purchase order number in a prominent spot and large typeface so it stands out.
Date Ordered
Date ordered would be the date the purchase order was issued. This information is important for tracking and determining the delivery date.
In the next row on your purchase order should be the seller’s information and shipping information:
Ship To Information
Shipping information includes:
- Where the materials or services are to be shipped to.
You can write Same in this box if your billing information and ship to information is the same.
- How the items are to be shipped.
An example of stating how the items are to be shipped would be if you have an account at UPS you want the supplier to ship the items via UPS on account.
Including Your Truck means you want the supplier to use their own truck or shipping service. If shipping is free, make a note of it
- You can also include a tag in the shipping information box. This comes in handy when the shipment comes in for a specific job. The person receiving the shipment knows what it is for. A tag is also handy for cost accounting purposed (explained later).
Supplier Information
The supplier information details are laid out like the buyer’s:
- Sellers’s name
- Seller’s mailing address
- Seller’s phone, fax and email addresses.
Including this also makes it quick work following up on an order should you want to make a change or check the shipment will be on time.
- Seller’s website address would also be handy especially if you don’t purchase from them often and want to have a look at their website to make a new order.
Next we will discuss the purchase order description section.
Purchase Order Description
In the bottom section of a purchase order is where the description of what is being ordered.
- Quantity
How many of each item
- Item or service description or name
The supplier may use part numbers as part of the item description.
- Price
The price would be the price listed on their website, your confidential price list or the price you were quoted. If you were quoted a special price for this order, include who gave you the quotation, the date of the quotation and the quote number.
- Total Before Taxes and Shipping Charges
A sub total of the purchase cost before taxes and shipping charges are added.
- Shipping Charges
The caluculated shipping charges for the order. Make a note if shipping is free. Some areas charge tax on shipping charges differently than on the rest of the order.
From an accounting point of view, when looking at costs of doing business and where to some money can be saved this information would be helpful.
- Taxes
The calculation of the applicable taxes. If state/provincial taxes and federal taxes are applicable, show them separately. Makes things easier later when calculating your remittance to the applicable tax department offices.
The purchase order needs to be signed.
Purchase Order Signature
Include a spot for the person who placed the order to sign the purchase order.
Because this is a legal document a signature is required. Also when you get bigger and multiple people are making purchases there is a record of who placed the order when there are questions.
Now you know what the parts of a purchase order are you need to produce a purchase order.
How to Create a Purchase Order
Like sales invoices there are different ways you can create a purchase order.
- A purchase order book purchased at your stationary store.
This is probably the easiest method of creating a purchase order if you are not paperwork or computer savvy. It is also convenient for crews on the road. If you give your road crew a P.O. book, a) Record the beginning and ending numbers in the P.O. book in case they are naughty and don’t had in a copy of the P.O. for the office to use and b) Make it a policy to purchase P.O. books with at least 2 copies in them. One for the person who has the P.O. book and one copy for the office. A 3 copy book might be appropriate, depending on your industry, as the supplier might want a physical copy of the purchase order for their records.
- A template made in your word processor or spreadsheet application.
Don’t forget to change the number next time you use it!
- The third way to issue a purchase order is through your accounting software. This might be more time consuming as you have to fire up the computer or wait for someone in the office to issue the purchase order for you through the accounting software.
Which ever way you decide to issue a purchase order, make sure it is filled out completely and you keep at least one copy for yourself.
A thought on further organization, if there multiple people involved in your business (think ahead as your read this) it would make everyone’s life easier if multiple copies of the purchase orders issued are distributed to the people who need to know about the purchase:
- The shippping and receiving department.
Your shipping and receiving department would need to know things are coming in and make room for them if applicable.
The person receiving the shipment would need to know who/what it is for so he/she can get it to the right person or place.
- The person handling the project.
The person handling the project or job knows what has been ordered and when to expect the material or service.
If it’s you running the project, if you put a copy of the purchase order in the project file or attached to the workorder you know it has been ordered and that piece of paper is a trigger to follow up to make sure the delivery is on time.
- The accounting department
Ideally, the purchase order is matched up with the shipping documents your shipping and receiving received to confirm the order is complete and the purchase order, shipping documents and invoice are all matched up to confirm the invoice received is correct. Staple them all together and file away. Your record for the tax auditor when they come so they don’t have to bother you.
Why bother doing all this? There are advantages to getting into the habit of issuing purchase orders right from the start.
Advantages of Issuing Purchase Orders
The above might seem like a lot of work, especially when you are a one person operation (for now) but there are advantages to using purchase orders.
- Keeps you organized as to what you are purchasing for the business.
- Should you become ill someone can step in and see where you were at with an order or project then step in to continue the business while your recover.
- Your accountant is going to want to do a profit loss report at the end of the year. A profit losss report compares how much money you brought in (your sales invoices) and how much your spent (your purchase orders plus salaries, utilities, etc.).
- You save time when the tax auditor comes by. Just point them to the filing cabinet instead of you finding the appropriate papers scattered around the office or somewhere on your lonesome computer.
- Great preparation task for when your business grows enough that you have to hire staff. Everyone can pick up the ball when someone in the office is out or off sick.
- Can do cost accounting
If you keep track of your sale price for a job (or item) and the costs to sell that item before including your overhead you can determine if this type of job or product should be sold at a higher price or if you can save some money somewhere and pass on the savings to customers which would increase the volume of sales.
By doing cost accounting as you go, you know right way whether you are making money or loosing money instead of at the end of the year when your year end is done.
- Inventory control
If your business relies on inventory being on the premisses issuing purchase orders will let those concerned know that another X of that item is expected on Y when you are running short. Commitments on delivery can be adjusted at the time the order is placed thus keeping customers happy that you let them know their order is going to be a little late ahead of time instead of waiting for the “Where is my order” call.
No one likes doing paperwork but it is a necessary evil when running a business. You either have to do it yourself or spend money (and time explaining what you did) to have someone else do it for you. The easier you make it for your accountant to put together your taxes, the better for you financially and time wise.
Get organized now! Start using purchase orders. All it really takes is a trip to the stationary store to purchase a purchase order book to get started.
Sales Invoice Basics
Some people are just not made to create paperwork but if you are going to run a business learning how to make an invoice is important. Learning how to invoice correctly will save you time and money. Invoicing is the lifeline of your business. You don’t pay for services or utilies at home without an invoice do you?
What is a Sales Invoice?
A sales invoice is a record of a sale you made. The customer pays for the goods or services received based on your invoice.
An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms. The buyer has a maximum amount of days to pay for these goods and is sometimes offered a discount if paid before the due date.
Invoice – Wikipedia
How to Make an Invoice?
First let’s talk about making your invoice look professional. How your invoice is created also reflects on the professional image of your business. It is also an opportunity to do some marketing.
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Include Your Logo
Part of your branding strategy should be to include your logo on each and every piece of stationary you distribute, that includes your invoices. Include your logo in the top of your invoice. Usually it is in the top left of the invoice.
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Include the Word Invoice
Include the word invoice in good sized letters to make it clear that the document is an invoice (opposed to an estimate, proposal, credit, etc.). Off on the top right, free of other clutter would be a good spot.
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Include Your Contact Information
Include all the contact information a customer might need including:
- Your business name.
The official name of your business. If you are incorporated, a limited company or any other registered business, include the official business name on your certificate of incorporation/registration.
- Your business address.
If you are working from home and do not accept client visits include your mailing address and note it as such.
- Phone, fax and email address.
Including your business phone number, a fax number (yes some people still use fax numbers) and an email address provides a number of ways for the customer to contact you should they have a question. If you have set up your website on your own domain as suggested in our Strategies to Present a Professional Business Image article you can set up an email address just for accounting/billing questions (makes you look bigger than you are if you are a one person show too (wink)).
- Your website address.
Having your website address on your invoice provides another contact/marketing touch point. The customer has your web address right there to place another order or double check pricing if they are confused by the invoice.
- Your business name.
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Show Your Registration Numbers
Depending on how your business is setup and the laws in your area you may be required to include your business license number as well as your tax collection numbers. Certainly tax number(s) if you want to collect taxes from the purchaser.
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An Invoice Number
All invoices need a number. The traditional way to number invoices is sequentially and this is how they are numbered if you use accounting software, an online billing service like PayPal or an invoice book.
For a job were you are progress billing a larger contract you might be able to add the progress invoice number (e.g. Prog. #1). If not, include this information somewhere in the description of what the invoice is for.
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Payment Options and Information
Provide all the forms of payment you accept for invoices. You will notice that the bills you receive in the mail from the your credit cards, utilities and other accounts you have do this.
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Due Date
The due date may not be applicable if you require prepayment for your orders.
If you are allowing people to be billed then state the date they are to pay the invoice by. Credit cards usually state a specific date but in business the traditional due date is 30 days from the date of invoice.
You could improve your cash flow by offering a discount for early payment. e.g. 2% discount if received within 10 days of invoice date. One small business I worked for saved enough doing this to cover their utilities bills.
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Terms of Service/Conditions
Your Terms of Service (TOS), return policy and Conditions of Sale might be too long to fully explain on the front of the invoice. You will notice that when you receive a bill in the mail, these are usually on the back of the bill. For electronic invoicing this is a bit more difficult. If your invoicing system can not accommodate this at least provide the important points with a link to a full copy on your website. These should be on your website anyways and easily accessible before their online purchase for good customer relations.
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Customer Information
Most ecommerce software you can make any of these required information. The software can be programmed to verify that the information like phone number, email address and zip/postal code are entered correctly before processing the order any further. If you accept orders from individuals you might not want to make fax number, tax numbers and website address required.
All of this information should be collected manually when you are not using a website to accept and process orders.
- Customer name or their official business name.
Businesses wanting to use the tax benefits of their tax numbers should provide their official business name as registered with the tax number account.
- Customer contact information.
Their billing address, phone number, fax number and email address are all contact points for you to contact them should you have a question about their order and for future contact (if they opt in to being contacted in the future but that is another post).
- Their P.O. number. (purchase order number).
Larger businesses (small businesses should do this too in preparation for expansion) use a document called a purchase order when ordering things. You might have seen this question when ordering from a stationary store like Staples. The purchase order lists what they are buying from you. Some will include the pricing for their purchase. This is what they are expecting to pay for the order. If it is wrong you should contact them on receipt of the purchase order and correct them instead of shipping the merchandise, billing them correctly and then getting into a discussion about the price later.
- Their tax number(s).
In some areas you calculate what tax you have paid and what taxes you have collected then remit the difference. There are some items that are non taxable if a tax number is provided, another reason to get this number from the customer. To find out how to deal with this contact your local tax authority.
- Customer name or their official business name.
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Customer Shipping Information
This is the information you need if you are phyically shipping the order.
- Name of business or person the order is to be shipped to.
- Address where to ship the purchase to if different from their billing address.
- Contact information at destination. Person to contact and their phone number.
- Zip code/postal code for the shipping company or post offfice to direct the shipment to the right area.
Including how the merchandise was shipped including the receipt number or waybill number makes it easy to track who and how the shipment was shipped should there be a problem. Noting who signed for it would also save time later if you needed the information.
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Invoice Details
The more information you provide in the invoice details section the better for both of you. Everyone is clear what the invoice is for and saves time having to look for backup information should there be a question.
- Date product or services were provided.
- Details of what was sold or service provided. An itemized list is the standard when multiple items are being billed for in the invoice.
- Total before taxes.
This is the total of the order before taxes are added.
- Shippig charges
On a separate line show the shipping charges for the order if shipping is not free.
- Duty and custom charges
If you charge duty and custom charges as an extra charge when invoicing the order instead of the shipping company or post office collecting them for out of country shipments include this on the invoice.
- Taxes charged.
For areas where collection of multiple taxes is required, show each tax calculation on a separate line. This makes it clear to the customer what taxes were charged on the order and it makes it easier to calculate the taxes you have collected and have to remit.
So there is your long list of what is to be on the invoice. Now you want to know what to use to actually produce the invoice.
Producing Invoices
Most these days have an accounting software either on their computer or use an online service to produce their invoices. Once you have the template of the typical information on your invoices set up it is just a matter of filling in the customer details, shipping details and order details, recording the invoice then either printing it for mailing or email it off to the customer.
For those who do not have accounting software or the not so computer savvy there are a couple of options:
- Use a word processor or spreadsheet on your computer to produce your invoices. Remember to change the invoice number next time you use your template!
- Use a preprinted invoice book from the stationary store.
Invoicing Records
Everyone wants to go paperless but sometimes paperless is not practical.
You need to have your own copy of the invoices issued for your records. The accountant is going to need these to calculate your yearly sales at tax time. When you get audited by the tax department it is a lot easier to point them to the filing cabinet instead of them tieing up your computer reviewing your books. And latestly, should there be an inquiry regarding the invoice it is sometimes easier to look for a hard copy instead of firing up the computer and searching for it.
Depending on your business, the following might be suitable (this is what I do):
- A stack of invoices in numberical order for the purpose of calculating sales. For a larger firm where you have someone doing the bookkeeping for you it is easier for them to find things by the invoice number.
- A copy in the customer’s file. When you have a repeat customer it is easier to find their invoices if filed in their own customer file. All the details applicable to the invoice (emails, purchase order, shipping documents, etc.) are right there in one spot, attached to the invoice.
There is one more record you need to keep, a sales ledger (accounts receivable list). When you are smaller a list on your desk to keep track of who owes you money, when you expect money coming in and who has paid their bill all helps you keep on track for your cash flow. No invoices get left unpaid. You are on top of it.
For those who use accounting software there is a section to enter money received from customers and get a report of who still owes you money. It is just a matter of entering payments as received and running the report.
Invoice Promptly
Invoicing promptly is an issue for businesses that do not require prepayment that causes poor cash flow. They do their invoicing in batches (usually at the end of the month) instead of dealing with it daily or as the job is completed. The sooner you send out your invoices the sooner you will get paid. This improves your cash flow. Instead of money coming in next month than you could have had this month it is arriving sooner. You can pay your bills sooner to take advantage of discounts if possible, don’t have to worry about meeting payroll (if applicable) and keep your inventory well stocked.
Here is another reason to invoice promptly. This quote is from an article written as a content provider who didn’t get paid. It is applicable to any type of work you do.
Some writers actually incur their own problems by not staying up to speed on their invoicing matters. Make sure that you have been turning them in on the requested date so that payments are not delayed. In the event you turned one in for June 30 with the agreement you were to be paid by end of July, follow up on Aug. 1 if you have not received payment.
What Do I Do When My Client Will Not Pay Up? – Freelance Switch
In this instance, the company they wrote for closed shop. If you haven’t kept up your invoicing and follow up you don’t have a leg to stand on when trying to collect your money.
Learn the Basics of Sales Invoices
Some people are just not paperwork people, I understand that. But consider how much time (and money) you are going to loose if you do not learn even the basics of producing an invoice in a timely fashion and following up on payments due. Yes, you can leave this all to the accountant to do, for a price (including your non productive time explaining what you did to him or her), but as a small business you need to pinch every penny you can. Get your cash flow working for you instead of against you. Get that invoice out, collect your money sooner, pay your financial obligations sooner and reinvest into your business.
Sales Invoice Articles
Strategies to Present a Professional Business Image
It doesn’t matter how large or small your business is, presenting a professional business image is important to the success of your venture. You don’t have to spend tonnes of money to create a professional image for your business, just spend your money wisely.
Present a Consistant Business Image
While planning your business or undergoing a makeover think about the whole picture instead of just the little bits you need now to start with. Even though you might not be ordering or needing stationary at the moment, for example, how your overall business image components will fit together is important. Something like your logo should be laid out and drawn is such a way that it can be resize for different applications. e.g. website logo, stationary, brochures, your social networking avatars, your Twitter background, your Facebook business fan page, your forum avatars, etc.
The larger businesses develope a style guide. This is a document where the logo, company colours, fonts used and other things are documented to make sure the overall professional business image of the company is kept in tact. Just because you are starting out or a small business doesn’t mean you can’t develop a company style guide. It will come in handy when hiring out different parts of presentation material as your business grows.
Next we will cover different ways to present a professional business image.
Professional Web Address
We are all penny pinchers when starting a business but your web address is not the place to penny pinch. Your web address (domain name) is your identity on the web. Owning a domain name (e.g. yourbusinessname.com) for your business is much more professional than yourbusinessname.freewebhosting.com.
Think big! What will happen when you out grow your freebie web space? What if it closes? GeoCities (free web hosting run by Yahoo! for years) was closed by Yahoo! Many people built their business on this free web hosting service and had to start over as there was no way to redirect (send) the search engines, existing links and people who had bookmarked their site to the new location. You can’t get a hold over everyone to let them know you have moved, there is just no way you can.
With your own domain name you can move web hosting any time you like. Your “address” stays the same, just the server hosting (storage location) your website is changed.
Professional Email Address
Who do you have more confidence dealing with? Someone that uses an email address at their own domain or someone that uses a free email account like Gmail or Yahoo!?
I understand that using web mail at these type of free email accounts seems simplier for the not so computer savvy but you need to move out of your comfort zone to look professional during your day to day business. There is nothing wrong with using these free email addresses as a backup plan should for some reason your website mail server is broken.
Did you know you can set up your email program on your computer to pick up and send emails via your web server email account? Yes you can! It is not that hard to do, really! Another thing to consider is, what if you have no internet connection? On holidays, on a plane or your internet connection is just plain broken. You can’t get to your web mail. With your computer (or whatever you use) set up to use your website mail server you can pickup mail when you have access, have a copy of the emails on your computer (in case the web server fails), can send and receive using your domain email address and can create your replies ready to go once you are connected to the net again.
Professional Logo
If you don’t have an artist bone in your body, don’t try and create your own logo. Your logo is one of the most important branding tools you have.
You could use a logo creating website or software program but then there are lots of others with the same basic logo as you. You want to stand out.
If you can, spring for a professional to create your logo. If not, there are lots of economical places you can get a logo done but make sure it is unique! Paying someone that uses a logo creation software or recycles their stock logo setups in not any better than you doing it yourself using an online logo creator or software.
Professional Colour Scheme
There is a reason that you see a lot of sites and businesses using the same colours. That is because they a) look professional and b) the psychological impact of the colours work to get results. You don’t see too many businesses using wild colours, do you? Uniqueness is good! But taking it to the extreme could do more harm than good in extablishing yourself as a serious business.
Also consider colour contrast. Colour contrast is where when one colour is put on top of another and making sure the top colour stands out enough to be readable to all that need to read it. This isn’t just an accessibility issue, those with perfect vision have problems reading things that have poor colour contrast also.
Professional Website
Give your business a professional image with a professional looking website. It doesn’t need a ton of bells and whistles but it does need to meet the needs of your intended target audience.
A good combination of a professional logo and good colour scheme used in the right layout can give you miles of room for expansion later. It’s all about the planning stage of your website. Give the designer enough information about your future expansion ideas so room for these can be incorporated into your initial website if your current budget doesn’t allow for all that is on your wishlist at the moment.
Professional Email Correspondance
Each email you send on the behalf of your business leaves an impression with the recipient. Make that impression a professional one. Include a professional looking email signature complete with your contact information (Your name, company name, phone and fax numbers, email address, website address and 1 or 2 social networking urls where they can find you on the net).
Email backgrounds and image signtures might be ok for your personal emails but they don’t look very business like. Also, some who receive your emails may have images turned off or have chosen to receive emails in plain text (which stripes the background, coloured text and images) for security reasons.
Address incoming emails in a timely fashion. Nothing more annoying sending off correspondance to a firm and having to wait ages for a reply. With everyone getting so use to instant results on the net their patience isn’t as it once was. They want answers now.
Social Networking
Everything you do on the net in public ventues like social networking sites (and forums) is a reflection on you and your business. What you want to do is come across as a knowledgeable and helpful person and/or firm. It is just like offline networking. Your name gets forwarded when another person hears of something you could help with.
For your Twitter account you can personalize your Twitter page with a custom background and matching colours for the sidebar. Twitter uses a fixed width for the center part of your Twitter page these days with a flexible margin down the sides. There is also the top bar with Twitter’s search to consider also. Keep this in mind when designing your Twitter page background and your logo (if you intend to include it) as some of your important information could be cutoff or hidden when the visitor is using a smaller screen, browser window or lower resolution.
On Facebook you can have a business page. Like Twitter, you need to make this interesting. You can add your logo, a strip of images across the top and even some additional pages for marketing purposes.
There are tonnes of social networking sites you can join. The key is to keep your presence on these sites consistant so people recognize you when they see you around the net.
Clear Consise Policies
To present a professional image, clearly state your policies regarding shipping, returns, how the information the visitor gives you is handled and payment terms. All of these instills more confidence when dealing with your business.
Present a Professional Business Image
Above are a few things that will give your business a professional business image. Ask yourself what you have seen when dealing with other businesses that made you feel comfortable doing business with them. What about the firm gave you the impression of a professional business?
Add some more ideas in comment area below. I’m sure there are lots of other ideas that can be added to your strategy to present a professional business image.
Forum Marketing – The Right Way
One of the ways to build the reputation of your business or yourself is to join a forum and start participating. Forum marketing is quite an easy way to market, if you do it the right way.
What is a Forum?
Some of you may not participate on forums or have not even heard of them if you are new to online marketing so here is an overview of what forums are:
An Internet forum, or message board, is an online discussion site where people can hold conversations in the form of posted messages. They differ from chat rooms in that messages are at least temporarily archived. Also, depending on the access level of a user or the forum set-up, a posted message might need to be approved by a moderator before it becomes visible.
Forums have a specific set of jargon associated with them; e.g. a single conversation is called a “thread.”
A forum is hierarchical or tree-like in structure: a forum can contain a number of subforums, each of which may have several topics. Within a forum’s topic, each new discussion started is called a thread, and can be replied to by as many people as wish to.
Depending on the forum’s settings, users can be anonymous or have to register with the forum and then subsequently log in in order to post messages. On most forums, users do not have to log in to read existing messages.
Internet forum – Wikipedia
To add to the above definition, each reply in the thread (conversation) is called a post.
Some forums are better organized (multiple sub forums to keep like topics together) than others.
There is also a hierarchy of membership. Members will have some sort of title usually designating their role in the forum:
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Administrator
The forum Administrator is either the forum owner or a person(s) designated to run the forum. They are at the top of the forum membership hierarchy.
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Super Moderators
Super moderators are 2nd in command under the Administrator. They monitor the general activity of the forum and have administration powers to remove members, threads and posts.
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Moderators
Moderators are like Super Moderators but with less administrative powers. They are generally assigned specific subforms to moderate (watch over). In some forums, they just have Moderators, skipping the Super Moderator designation but have Super Moderator powers.
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Mentors and VIPs
Mentors and VIPs are respected members within the forum. The Administration, Super Moderators and Moderators noticed their valuable contribution to the community and upgraded the member status to reflect this. Mentors and VIPs don’t have administrative powers but they do pull some weight keeping conversations on track.
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Regular Members
All the rest of the members of a forum are regular members. They might have a title under their user name which could change as their number of posts increases. When you start out in a forum you will have some sort of title under your name designating you are the new kid on the block.
When you join be sure to check out how the forum membership hierarchy works and is shown within the forum. You certainly should listen to anyone above the general membership level, especially when they are correcting you. That does not mean you ignore information posted by your fellow general membership members because some have valuable information to share and just don’t care to have their title upgraded for whatever reason.
Forum Rules
Every forum has it’s own rules. You probably had to agree to abide by them when you registered. If you just clicked the “I agree to follow the rules and guidelines” part of your signup process, go back and actually read them. The first way to get in trouble on a forum is to not read the rules and violate them.
As a Super Moderator on a few forums I offer the following tips to stay out of trouble:
Your About Me Page
Some refer to your About Me page as a forum profile page.
Following the rules outlined, fill in your About Me page (forum profile) with information about you/your business. Anyone curious about the person behind your user name will click your name to find out more. Don’t try and hide links and stuff that breaks the rules in your About Me page. The Moderators and Super Moderators will find it. That includes links to sites that are not allowed in the general area of the forums.
Forum Signature
Once you have posted (replied to conversations or started a thread to ask a question) enough on a forum (number of posts required varies) you will be allowed to have a forum signature. A signature is added to the end of each of your posts you make in the forum.
What you are allowed to have in your forum signature will be outlined in the rules and guidelines of the forum somewhere. Reread that section before creating your signature.
A forum signature can be used to promote your business or yourself. Sort of a sales pitch. If you are being really helpful in the forum other members will click the link in your signature to get more information about you and your business, just like your About Me page.
Links are generally allowed in your signature (read the rules to double check the number allowed). One thing on most of the forums I moderate on that is not allowed are affiliate, referral and shortened links.
On some forums there are ads offering to sell their signature on different forums. Don’t go there. Super Moderators and Moderators don’t just hang out on the forum you are participating on, they participate on other forums also. If the forum you are registered on does not allow the sale of your signature that’s a real quick way to get banned (or the person who you bought the signature from thus wasting your money).
You will also see questions about whether signatures are nofollow or not. What this is about is some of the bigger search engines are using the nofollow attribute within your signature link to not go to your website or blog. If getting links back to your website or blog is the only reason you are joining forums, you are approaching forum marketing all wrong. You should be making contributions to the community and not worrying about the search engines picking up the link in your signature (or About Me page for that matter). If the nofollow attribute is not used on the forum you joined that is just an added bonus of forum participation.
Quality Posting
Some forums are more strict than others as to the quality of the posts they want to see. Short “I agree” replies are generally considered a low quality post and will be removed.
You are there to participate and get help. Join the conversations with well thought out questions and replies. Hint: This is a way to get the Mentor or VIP title under your name eventually. (smiles)
General Forum Marketing Tips
Forum marketing can be a great way to build your business or general credibility. Use your forum posts and questions wisely.
Self Promotion within Replies
Self promotion within your replies or when you start a thread is generally a way to get yourself in trouble on a forum. Review the rules on self promotion.
But this article is about forum marketing, how am I supposed to market if I can’t self promote? By being helpful! Share your knowledge with the less experienced. If someone has a question about a marketing technique you have tried, reply with information about what worked and what didn’t.
Weed Out the Misinformation
Forums are great places to get information about all kinds of things. Online marketing, offline marketing, general business help are all discussed in forums. Along with the great information there is a lot of misinformation spread around through hear say. Pay attention to those who back up their replies with links to and references to reliable sources to confirm what they say. e.g. SEO (search engine optimization) is one of the topics with a ton of misinformation floating around forums. The best answers will reference the webmaster guidelines (rules), usually Google’s because they have the best information available for website owners to read if they take the time to read it.
Have a Thick Skin
Some people on forums just like to be what are called trolls. They just love stirring up trouble or just like to be mean. Generally, the Super Moderators, Moderators or Mentors will step in and tell them to back off but in the meantime, don’t get upset someone bit your head off with (what they thought) was a silly question or statement. Someone will come along and be a whole lot nicer about your question or statement.
There is sometimes a review section in the forum where you can post a request for review of your site. This is the section you need a really thick skin. You worked so hard on your site and are all proud of what you have done then someone comes along and tears it apart in a not so nice way. Sometimes they are right (but didn’t present their ideas very nicely) and some input you can take with a grain of salt. Put aside your hurt feelings and look at the comments as constructive criticism. Some people genuinely are trying to help.
Heated Discussions
When a discussion gets heated, don’t reply with nasty pointed comments directed at the person you disagree with. a) They probably wil come back with a nasty comment about you which turns into a bunch of replies of you two fighting. b) It derails the follow of discussion. Not everyone has to agree on something. Heated discussions can be a good place to learn 2 sides of an issue.
If a discussion gets really heated it is better to walk away than continue arguing with someone that is head strong and just doesn’t want to see your point. Just excuse yourself from the conversation (without pointing fingers) and participate in another conversation.
Be Prepared to Back Up What You Say
If you want to make a statement as a fact, be prepared to be challenged by another member. A better approach would be to provide links and references from trusted, reliable sources to backup your statement in the initial reply. You still might get someone that challenges you but that’s what forums are about, discussion.
Using Forums for Marketing the Right Way
Forums are a great way to demonstrate your knowledge on a given subject. By sharing your knowledge, helping those new to the field and supplying creditable resources (not necessarily your own site) this is the way to do forum marketing.
Please share any other forum marketing tips you have with the readers.
More on Forum Marketing The Right Way
Below are some more articles around the net on forum marketing the right way:
Small Business Makeover
About.com Guide Susan Ward is offering another free course by email. This one is called Small Business Makeover.
The Small Business Makeover consists of a “workout” each week which focuses on increasing your business success by improving a particular aspect of your business. The topics covered are business planning, business finances, customer service, information technology management and small business marketing.
There will be 5 workouts sent. You can do them all or just one or two, it is up to you.
Sign up is at: Small Business Makeover.
I have signed up for Susan’s previous courses and they were great.
SCORE
You hear about Score when reading business related blogs or visiting business forums so I thought I would check it out. At first glance it looks like a business resource that has lots to offer American business owners.
About SCORE
What is SCORE?
SCORE is a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA), and has been mentoring small business owners for more than forty years.
SCORE is a valuable network of 13,000+ volunteers who offer small business entrepreneurs confidential business counseling services at no charge. SCORE volunteers have the knowledge and experience to help any small business owner get the help they need. Our dedicated volunteers represent over 270,000 years of experience across 62 industries.
Looking that the navigation this site seems to be well organized.
Business Resources at SCORE
Mentoring
SCORE offers free confidential business by contacting one of their mentors.
- Contact a mentor by email. You can search for a mentor available by email.
- In person mentorship meetings are available through one of their local chapter.
Workshops & Events
The Workshops & Events page offers local and online workshops. If interested in local workshops or events you can search by your zip code.
Templates & Tools
The latest tools and templates are listed on this page or you can search by:
- Topic
- Industry
- Type
- Demographic
The search results just show the item title and date posted. A description of the item would probably be a valuable addition.
If you don’t like using this, there is a list in the bottom navigation of each page with the templates and tools catergorized:
- Assessments
- Podcast Series
- Templates
- Calculators
- Funding Tools
- Quizzes
- How To Articles
- Checklists
- eGuides
- Workbooks
Clicking one of these links gives the same format of results as the search, document title and date.
Topics
Under the Topics dropdown there are 3 departments:
- Business Stage
- Starting a Business
- Growing Your Business
- Selling/Exiting
- Entrepreneur Type
- 50 Plus Entrepreneurs
- Manufacturers
- Minorities
- Rural Entrepreneurs
- Veteran, Guards and Reservists
- Volunteers
- Women
- Young Entrepreneurs
- Business Topics
- Accounting and Budgeting
- Government Contracting
- Business Planning
- Cash Flow Management
- Financing
- Human Resources & Managing Employees
- International Trade (includes Import/Export)
- Legal Issues (includes Business Licenses)
- Management
- Sales
- Technology & Computers
When you select one of these topics the resulting page is divided into:
- Upcoming Events
- Latest News
SCORE as a Business Resource
Results are a bit disappointing in some sections. Thought SCORE had been around long enough to have a ton of articles available. Maybe they have a new website at the time of this article and dumped a bunch of old material?
A bunch of stuff you can’t access unless you signup.
Perhaps our American business owners who have actually used SCORE can enlighten us on whether it is a good business resource.
Join the V7N Official Server Sync Up Contest running May 1-31, 2011 to win 6 Months Free Dedicated Server with ServerClub (or $500 cash), $250 cash or $100 cash. Extra prizes include a free directory listing at V7N Directory.
Better Business Bureau®
The Better Business Bureau® is an organization where businesses and consumers can find each other with an element of trust incorporated. Through screening only those businesses meeting the standards set out by the Better Business Bureau® can display the BBB® logo. Through their local offices, consumers and businesses can access lots of business related resources like check/display a business’ credibility and resolve issues when things have gone wrong.
Businesses at Better Business Bureau®
Businesses go through a screening process to be listed as a member of the Better Business Bureau®. There are a set of standards which are to be complied with and maintained. Members of the Better Business Bureau (BBB®) support the best business practices for their given industry.
On the business side of the organization, the BBB® provides these services:
- Free business reports showing the business’ background, licensing, consumer reports and other information
- Resolution/arbritration services when there is a dispute between a member and a consumer.
- BBBOnline™ seal for online merchants.
- Awards for excellence, trust and leadership in the marketplace.
Charites and the BBB®
Charites can register with the BBB to verify their legitmacy by providing documentation proving they meet these basic standards:
- How their operation is run.
- How the money they raise is spent.
- Disclosure of basic information to the public
Consumers and the Better Business Bureau®
Consumers can visit the BBB® website or call to inquire about a business and the business’ track record with the organization. The BBB® keeps track of any complaints and how they were resolved.
For consumers, the Better Business Bureau® provides:
- A service to checkout a business or charity.
- Business and charity directory.
- Explanation of what the BBBOnline™ logo represents when they see it on a website.
- A service to file a complaint about any business (not just member businesses) should you not be able to resolve the issue with company involved.
- Consumer news and tips.
Better Business Bureau® Offices
There are local Better Business Bureau® Offices available. To check for the closest BBB office in your area visit one of the following:
Join the V7N Official Server Sync Up Contest running May 1-31, 2011 to win 6 Months Free Dedicated Server with ServerClub (or $500 cash), $250 cash or $100 cash. Extra prizes include a free directory listing at V7N Directory.
Organize Your Small or Home Office
Susan Ward of About.com is offering a 7 week free course by email on organizing your small or home office.
The course covers:
- basics of small or home office design
- setting up a filing system
- organizing paperwork such as receipts, and protecting your business data
- tips to help you work more efficiently
A new lesson is sent each week once you signup.
Read more about the free Organize Your Small or Home Office course on the About.com site.
How Are You Going to Market Your Business?
When developing a business plan for your new business idea the plan needs to take into consideration how you are going to market your business.
There is more to marketing your business than just advertising the business and making sales. Before you can build a marketing plan there is some leg work you need to do.
Market Research
Market research is about a popular as doing a business plan but it is a necessary evil when starting and building a business. You need to take the time to research the following so you know if there is a potential to be profitable and possibly have to make some adjustments to your business idea.
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Who are Your Competitors?
- Who exactly will you be competing with?
- What are your competitor’s strengths?
- What are your competitor’s weaknesses?
- Do your competitors have a good product? A medium quality product? An economy product?
- How are you going to position yourself against the competition? Better quality? Lower price? Faster delivery?
- How are you going to price your product or service?
- What quality does your product or service have to be to compete?
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Who are Your Potential Customers?
- What is your target market?
- What are the demographics of your target market? Their age, gender, income and other distinguishing trates.
- What level of education does your target market have?
The level of education of your target market will determine how simple or complex your product/service can be and the instructions that go with them.
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What are Your Product or Service’s Characteristics?
- What are your product or service’s features?
How are these features going to benefit the consumer?
- What warranty are you going to provide?
If you are going to provide a warranty or guarantee, how long is it going to be for? What will it cover?
- How are you going to package your product or service?
If you have a physical product, how are you going to package it? Does the packaging have to be fancy to market it better?
For a services oriented business, are you going to offer packages of bundled services to reduce the cost to the consumer or are you going to make it a la carte?
- Are you going to provide related products or services?
Will you be offering additional complementary products or services to go with your product/service?
- What are your product or service’s features?
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What are Your Costs?
- What is your overhead going to be?
Overhead costs are the costs of running the business. These include your rent, hydro, heat, salaries and other generally fixed costs of running the business. These costs determine how much markup you need to turn a profit.
- What are your production costs?
Whether you have a physical product you are marketing or a service, there are production costs.
For a physical product the production costs are the money you have to spend to produce the product.
When providing a service there are also production costs. For example a personal service like esthetician you need your creams, tools, towels, a bed, pans, a sink, blankets, etc. to produce your service.
Even if you are providing a service like web design there is the cost of software and internet for your service.
- What is your overhead going to be?
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Where is Your Business Going to be Located?
For a brick and mortar business, as they say, location is everything. Easy to access? Plenty of parking? Easy to find?
For a home based business, are you going to accept customer visits? Where in the home are you going to meet with them that is away from the rest of the family?
In either case, do you need to do some decorating or displays?
Once your have your market research done you can move onto how you are going to market your business through promotion.
Business Promotion
How to you plan on promoting your business?
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Your Target Market
Through your market research you should be able to determine what types of promotion works well for your target market.
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Where are You Going to Promote Your Business?
Again related to your target market, where is going to be the best place to promote your business?
Does your target market read printed material like the newspapers and magazines?
Does your target market go online to find your product or service? Even if you expect the majority of your target market to be the offline type, consider some online promotion to cover those who do shop online or at least do their research online before physically visiting your business.
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What Kind of Image Do You Want to Present for Your Business?
Presenting a professional image for your business is always important but the image your presentation also has to suit your target market.
- Do you want a sleek image?
- Do you want to present a friendly fun loving image?
A higher priced product or service there is an expectation of a certain image where as a home based handcrafted product business would want to present a different image.
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What Aspect of Your Business Do You Want to Promote?
With this marketing campaign do you want to promote:
- Price?
- The product/service itself?
- The quality of your product/service?
- Your service?
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What Resources Do You Need for this Promotion?
Being realistic about what resources you have available to produce a quality promotion is important. You can’t do everything yourself when you are a small business with the same quality required for some things as a professional can.
- Do you have the equipment, software and people to create this promotion on staff?
- What are you going to subcontract out to produce the quality of promotion needed for this marketing project to be successful?
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What Marketing Strategies are You Going to Use?
Selecting the right marketing strategies for the job is as important as selecting the right tools for the job.
- Do you plan on doing some advertising?
- Will you be doing something to get publicity?
- Is there a sale going to take place?
- Is getting out and networking off and online the right strategy?
With all your ideas and decisions from the above you can now create a marketing plan to implement what it is you are going to do.
Marketing Plan
The best laid plan follows the S.M.A.R.T. outline:
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Be Specific
Be specific with the goals of the marketing project. If you don’t, you won’t know if the project was successful or not.
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Make it Measurable
You won’t know if your marketing project was successful unless there is something in place to measure it against. e.g. If the goal was to specifically increase sales, you need a benchmark before the promotion to measure the results against. Likewise, you also need a way to measure the sales for the specific length of the promotion.
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Make Your Marketing Goal Acheivable
We all want our business to be successful quickly but setting high expectations for your marketing program and not reaching them isn’t good. Go for the lower apple on the tree. Next time you can shoot for the next highest apple.
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Be Realistic
Being realistic goes along with the goal being acheivable. If it’s going to take a huge influx of manpower or money to execute your plan, where is that manpower or money going to come from? If borrowing is the answer, is the marketing plan going to produce enough revenue to pay back the debt and leave you with some profit?
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What is the Timeframe of Your Marketing Plan?
Build yourself a simple bar graph with each task down the left. Have the days/months/weeks listed at the top. Now beside each task colour in the amount to time required to complete the task. When finished, jump down to the next task. Is it something that can be done as the previous tasks are being done or is it dependant on a previous task being completed first?
As you proceed down the task list, the right edge of your graph will grown. Once filling in all the task timelines you will have the timeframe required to complete your marketing plan.
Your graph also gives you the deadlines of task completion to keep the whole project on time.
Got a Plan to Market Your Business Now?
If you have followed along the whole procedures above, you should now know how you are going to market your business.
Take the information you collected and the marketing plan you created and put it in place. Your plan doesn’t have to be huge long project. It can be a short term project to meet a specific goal this time around.
Don’t forget to include your marketing plan in with your business plan. You will need this to borrow money, get a line of credti and generally keep yourself on track.