How many business owners do you know that complain about the customers that don’t pay them or pay late? Are you one of those business owners?
Do you realize if someone doesn’t pay you that this is partially your own fault? This can be because of many factors, such as:
Not researching your customer, did you find out anything about them before you extended credit? Did you only get a name and address to ship the product to? Avoid this by having every customer fill out a credit application and checking the references. This is free and just takes a little bit of your time but that little bit of time will save you much money in the long run.
Do you find other business owners saying well, they said they were friends with another customer of mine and that customer always paid me so I didn’t think there would be a problem? Do not do this! Many business owners fall into this trap. Someone is referred by someone else who might be a great paying customer but that doesn’t mean the new customer or potential customer has the same payment habits. Always check credit or offer cash only until you can determine if this person is credit worthy.
Take a lesson from the sub prime lenders that are going out of business all around us, they extended all kinds of credit to all kinds of people while boasting “Bad credit? We don’t care!” or “Apply with us, we don’t check credit!”
Yes, and look at them now. Don’t let this happen to you. You worked hard to be your own boss and have your own business, don’t let customers bring your business down.
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