Keeping an eye on cash flow
Dear Karen: I lie awake at night worrying about bills because my revenue is strong but cash flow is uneven. What can I do?
Answer: Put in place the infrastructure your company needs to nurture profitability. “Every day you lag behind on collecting on invoices, you’re financing your company’s operations internally,” said Matthew Kuchinsky, a certified public accountant and partner at New York-based accounting firm Citrin Cooperman & Co.
Establish a standardized billing process in which invoices go out on a particular date. Clearly state the payment deadline. Send late notices two weeks after the deadline and make reminder telephone calls. Make sure you accept credit cards and electronic payments and enclose a prepaid return envelope with your bills.
Decide how long you will let an account go overdue before you cut off services, and stick to your decision.
“Align yourself with a competent collection attorney so that you can put big problem accounts into collection. Even if that attorney takes a third of the recovery, you’ll get two-thirds of your money, versus nothing,” Kuchinsky said.
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Social networks for your business
Dear Karen: I know that online social networks have extensive reach. But is it worth the time to put my business on something like MySpace?
Answer: That long reach is a major benefit for businesses, as is the chance to get free exposure to millions of potential customers. And setting up and maintaining a profile in a social network isn’t that time-consuming, said Andy Leff, chief executive of business blog IncPlace.com.
“There’s no need to hire someone to manage network profiles. Most people think they have to because they hear about kids spending hours a day on these websites, but they don’t realize the kids are watching videos, instant-messaging and looking at pictures. A business owner only needs to put a small effort into creating the page, and then use it as essentially another branch of their online marketing,” he said.
The social networking sites have personal in-boxes you can use to send messages to your contacts and other members. “By crafting clear, well-focused, short messages you can pass along brief information about your business. Ratings, reviews and comments are another great tool for gaining visibility within a network,” Leff said. Posting bulletins on your contacts’ internal bulletin boards is another way to send mass e-mails to people who share common interests or causes, but without clogging their mailboxes.
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Tips to make your company greener
Dear Karen: I’d like to make my company more environmentally friendly. Any tips?
Answer: Your firm can help improve the environment by taking small steps. Purchase washable coffee mugs for your employees or ask them to use just one disposable cup daily. “The average worker drinks two cups of coffee a day, so by simply not throwing out your cup after the first refreshment you are reducing waste by 50%,” said Ralph Bianculli, chief executive of Paradigm Group, a supply chain consulting firm based in Syosset, N.Y.
If you do use disposable cups and bags, use paper rather than plastic, which takes more energy to produce and recycle. “Ask to be removed from mailing lists whose catalogs you do not read. Install a touch-free automatic towel dispenser in the restroom, which reduces usage by 32%, or switch to recycled paper towels,” Bianculli said. And ask your cleaning service to use products with biodegradable chemicals.
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Got a question about running or starting a small enterprise? E-mail it to ke.klein@ latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012
