New Year’s Resolutions for the Small Business Owner

Small Biz RezI came across this article discussing New Year’s resolutions for the small business owner. The collective list is incredibly insightful given the current economic climate and the rebuilding goals for the New Year. Here’s the comprehensive Cliff’s Notes version:

  1. Spend some quality time with clients – relationship building is key in establishing loyalty and client longevity
  2. Protect the company cash flow – business owners need to take steps to ensure they get paid for completed work
  3. Making it official – With changing times and technology, your marketing practices must follow suit
  4. Working on that work/life balance – Strike a new kind of balance that incorporates family AND business
  5. Putting money into human assets – Now is the time to ramp up efforts to increase employee appreciation, and moreover, employee loyalty

All great tips for any business owner. I want to focus in on one in particular though…

Protect the company cash flow

Not getting paid is a plague on service-oriented small business owners. Whether you’re a freelancer or creative firm owner, you’ve been there.

While you can and should take a proactive approach to protecting company assets, the article mentioned above takes a more defensive stance, and it’s about time. Small business owners have to start placing more emphasis on protecting their assets in this climate. Having had first-hand experience working for a small business, I understand the pangs and sleepless nights that accompany unpaid client invoices. I’m guessing collection agency work wasn’t what you had in mind when you first opened your doors, right?

Perhaps it’s time to start establishing new payment options (good-faith deposit) with clients that are known for dragging out the process. Or even accept 50% of the overall project fee upfront with new clients. And why stick with the old school pay-by-check options? It’s 2010! Adapting to new processes is crucial to small business survival. Initiating electronic payment processing is a lot easier than you might think, and may prevent you from many more sleepless nights in 2010. Besides, if you’re doing business with us you’re already partnered with a company than can help get things rolling.

So what other resolutions are you making this year? Certainly the five mentioned above will somehow carve their way into your lives in 2010, but what are some of the other resolutions you’ve made for the New Year? Leave them in the comments below…

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2 Responses to “New Year’s Resolutions for the Small Business Owner”

  1. Here in Chile 50% upfront is required, unless you’re ready to face serious problems such as a client running away in the middle of the project. And the last half is paid BEFORE going life with the website. We also now started to invoice client the last half when they are dragging their feet, for example we handed over a small website (2 weeks work) back in mid-November but as the client didn’t have time for acceptance testing we billed him for the laste part end of December.
    For very special cases we go for 1/3 upfront, 1/3 when going live and the last 1/3 after a month; it used to be our way to invoice but the last 1/3 was sometimes very difficult to get so we had to give it up.

    Some bigger companies or public institution here are using what’s called “Orden de Compra” which is a commitment to purchase from you (good or service) that can be used to be paid.

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  2. Interesting. Thanks so much for the comment, Jean-Luc. As for the States, I suppose your billing method really depends on whether you bill clients hourly or have a standing retainer. I know at one of my former positions we always had a tendency to overserve (which of course just comes with the territory), but when we had deadbeat clients it always made it sting that much more.

    So I’m curious to hear if there are freelancers/designers/developers out there that used to bill post-project by invoice, and have since changed billing methods in this icky economic climate?

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