Corrections or additions?
Author: Melinda Sherwood. Published in U.S. 1 Newspaper on January
5, 2000. All rights reserved.
Good Customers But Bad Payers: Steve Douglass
Faithful customers? Or repeat offenders? If at the end
of the day, your customers don’t pay, they may be bleeding your
business
slowly. Over-extending credit is a mistake that many small business
owners make, says Steve Douglass, district sales manager for
ABC Companies, a commercial collection agency located in Pequea,
Pennsylvania.
“If a customer thinks that they can get away without paying, they
will,” he says. “Generally they’ve ordered more products from
the business that they already owe. If they need that product or
service,
and they aren’t being pressed for payment, they’ll keep coming
back.”
Entrepreneurs permit the next sale and “it’s a vicious cycle,”
says Douglass, who speaks on “Coping with Customers Who Don’t
Pay,” on Wednesday, January 19, at 7:45 a.m. at the Nassau Inn.
Call the Princeton Chamber: 609-520-1776. Cost: $21.
The danger in this: as debt ages, says Douglass, the chance of
collecting
the full amount goes down exponentially. According to the Commercial
Law League of America, a commercial collection agency, a business
owner is likely to collect only 72 cents on a debt of $1 after 90
days. After 6 months, the business owner will probably only see 50
cents of that original $1.
Douglass spent 20 years in receivable management with Chase Manhattan,
overseeing a $40 million portfolio, before moving to ABC Companies,
a 70-year-old commercial collections organization with 200 affiliates.
A native of Elmira, New York, Douglass received a BS in engineering
from Corning College, Class of 1970, and then attended the American
Institute of Banking.
Small business owners don’t always demonstrate the business acumen
necessary to create consistent credit policies and chase down debts.
“When a customer applies for credit, they’re naturally thinking
`I’ve got another customer,’” he says.
The numbers tell a different story: “If a business operates at
a net profit of 3 percent,” says Douglass, “to offset an
actual
loss of $50 they have to make an additional sale of over $1,600.
Generally,
people don’t see that. They say, how can I generate more revenue and
therefore they go for the sale.”
Even small businesses need credit and risk analysis, says Douglass:
Create a credit policy. “Sit down with a CPA and goover the receivables and determine what your temperature is forrisk,”he says, “and how much is an average credit line for yourbusiness.The customers that represent over 5 or 10 percent of your profits— those you might be willing to take some loss on.”Explain the credit policy to consumers. “Thecommunicationhas to go with the first invoice,” he says. “If you’re tryingto play catch up, you’re losing time and money.”Strengthen follow-up.Call in reinforcements. Douglass recommends small businessoutsource to an agency like his own.”Outsourcing is big because small businesses are realizingthat they can’t do it all themselves,” he says. “Everyoneis trying to do more with less, even the small business.”Top Of PageSpeaking SkillsThe pen is mightier than the sword — if you knowhow to wield it. Karin Steinhaus of Educational Testing Servicecan show people how language can create new, and often surprising,business alliances. “The big payoff is when you enlist the aidof somebody who would otherwise be a block to getting your jobdone,”says Steinhaus, who speaks to the Institute of Management Accountantson “Effective Business Communication” on Wednesday, January12, at 6 p.m. at Good Time Charlie’s. Call 609-520-1188. Cost: $24.”Accountants have a reputation for precision, accuracy, andattentionto detail,” says Steinhaus. “I’ll help them invest theseskills(along with many other assets) to add value to their personalcommunicationsportfolio. Everyone is guaranteed to profit.”These loaded words are no accident. Steinhaus, a longtime member ofToastmasters, the public speaking social group, says that when youlearn what makes your audience tick, you discover “trigger”words — words that people can relate to. “I’m operating ona stereotype, but I want to use words that are likely to be familiarto them and perk their attention,” she says. “If I weretalkingto a group of gardeners, I would use phrases like `plant the seeds’and `make it blossom.’ If I were dealing with auto mechanics, I woulduse different words.”Steinhaus grew up in Georgia. Her father, originally a cellist withthe Chicago Symphony, taught at Jacksonville University in Florida.Steinhaus holds a BA in French from Oglethorpe College, Class of 1969,and a masters in applied linguistics from Georgetown University. Shetaught English for several years in France and Austria before becominga schoolteacher. Now she helps develop ETS’ test of English as aForeignLanguage.For Steinhaus, communication is about creating common ground —about diplomacy. “When people don’t feel they share a commonuniverse,they may avoid each other, or even see each other as a threat,”she says.Even for casual meetings, know the people you are dealing with andtheir communication style, says Steinhaus:Learn as much as possible about the person or people towhom you will speak. What interests them, what motivates them?”Youcan tap into things they’re already excited about to attract themto what you have to say.”Chose wisely between spoken and written communication;there are advantages and disadvantages to both. “Some peoplerespondmuch more easily to spoken communication and others to writtencommunication,”she says, “and it’s very good to figure out in what way thatpersonis going to be receptive. We find ourselves in these situations inan office — we submit an proposal, but the person in charge isn’tgoing to want to read it because he or she is a speaker. There’s somecues that people give you and you can guess whether a person is morereceptive to reading or speaking.”Know what outcome you want and determine ahead of timehow you will know you have achieved it.Top Of PageEntrepreneurs’ ForumAt the New Jersey Entrepreneurs Forum on Thursday,January13, at 6:30 p.m., John Freyhof of Venture Bank will address”Venture Borrowing Techniques,” and Richard A. MaloyJr.,of Maloy Insurance at 228 Alexander Street, will discuss his newbusinessventure. Maloy Insurance provides risk management and insuranceplacementservices and specializes in the information technology and lifesciencesindustries (E-mail: maloy@maloyins.com). The meeting will be heldat McAteer’s Restaurant, on Easton Avenue in Somerset. Cost: $45.Call 908-789-3424.Top Of PageStressed? Be HonoredWho’s the most stressed person in New Jersey? Maybeit’s your boss. Or maybe it’s you. If so, explain why in an essayof 50 words or less and send it to the just-built spa at the DoralForrestal hotel, which is conducting a contest to find out who reallyis the most stressed out person in the state. The winner gets afree-weekendof unwinding at the new spa, which offers aromatherapy, Swedishmassage,facials, hydrotherapy, mud baths, and sea salt scrubs. The packageincludes a hotel room with champagne, ergonomic chairs, and a featherbed, plus breakfast, lunch, and dinner for two.There’s a catch, however: the “most stressed” person has tomake time in their busy schedule to attend the contest announcementceremony on Thursday, January 27. Five finalists will attend, andthe four runners-up also get a prize, a day of spa treatment.Entries are due by noon on Friday, January 21, and will be judgedby a panel of Doral employees (applicants must be 21 years or older).For a complete list of rules, visit www.forestal.com/spacontest. Callsare not being accepted. Fax to Renee Rudolph, 609-520-0728,or E-mail renee_rudolph@meristar.comTop Of PageGroundhog Job Shadow DayOn Wednesday, February 2, close to 300 students willdiscover that there’s a link between education and success on thejob by “shadowing” professionals in area businesses. ButGreaterTrenton’s Promise, the organization sponsoring Groudhog Job ShadowDay, needs more shadow companies — businesses that will open theirdoors and appoint a company coordinator to provide students with abrief orientation. A wide range of shadow experiences are sought:clerical, manufacturing, sales, customer service, management, lineworkers, trade, medical and technology professionals, to name a few.To become a sponsor, call 609-984-7191.Top Of PageVolunteers NeededThe AARP’s Tax-Aide Program, the nation’s largest, freevolunteer-run tax counseling and preparation service, is seekingvolunteertax counselors in Mercer County. The program provides free tax helpat area libraries and senior centers for low and moderate income taxpayers with special attention to those 60 and over.No experience is necessary. People from all backgrounds are speciallytrained by the IRS and The New Jersey State Income Tax Department.Volunteers must agree to help assist taxpayers for a minimum of fourhours per week, from February 1 through April 5. Training classesbegin on January 13. Call 609-655-4358.Previous StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
