Business121 Small Business Newsletter #11

In this week’s Business121:

1. Dealing with late payers
2. Reach more customers at zero cost
3. Financing a start-up and saving money
4. Small Firms Loan Guarantee Scheme - How to apply
5. There's no place like home - Home working tips
6. Why contracts for IT services are important
7. SEO Duplicate web content penalty myth exploded
8. Section 660 Arctic Systems at the Court of Appeal
9. Small Business News

Dealing with Late Payers
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Of all the annoyances that are involved in running a small business, I'd have to say that dealing with late payers is probably the most time consuming and frustrating.

I'd say my experience is similar to that of most other small business people. Alarming statistics would seem to prove the point. Experian recently reported that companies now take an average of 60.8 day to pay their invoices. It's no wonder that so many start-ups go under as a results of cash flow problems caused by late payers.

Despite the existence of legislation that was created to protect smaller companies, small companies aren't in a strong position to "demand" that payment is made on time as they are most likely to be worried about losing a large client if they make a fuss.

This is particularly true of the Late Payment of Commercial Debts (Interest) Act 1998 which allows small companies to charge interest on late payment. Trouble is, many start-ups are reluctant to charge interest for fear of "annoying" those precious clients!

Instead, we all have to play that familiar game of chasing payment, talking to various people in sales and accounts (more than once probably), and exchanging several emails before the payment finally comes through. It's a ridiculous game, but small businesses have to put up with it in order to survive.

Having run several start-ups, and issued hundreds of invoices over the years, I've always been determined to get paid - I'd say around 40% pay on time, and the rest need to be "encouraged". Here are a few select tips for keeping on top of late payers.

1) Good Housekeeping - make sure all your invoices are stored centrally and tracked on a spreadsheet (or sales software). It will be much easier to see when a payment becomes "late" if your documents are in order. It's all too easy for a payment to be a month overdue before you realise it!

2) Internet Banking - An excellent way to see exactly what's come into your bank account on a daily basis, without having to wait for a paper statement, or having to call your local branch for days on end while waiting for a critical payment to arrive.

3) Payment Terms - Always print your payment terms at the bottom of your invoices. Include these terms on all contracts and proposals to clients. These terms should state your right to charge interest at 8% above base rate in accordance with the Late Payment of Commercial Debts (Interest Act) 1998.

You can read more tips in our dedicated late payment articles at http://snipurl.com/_Late_Payment and
http://snipurl.com/Practical_Guide

I'd also highly recommend taking a look at http://snipurl.com/Pay_On_Time - which deals with every aspect of late payment, including how to deal with common excuses, and a variety of letters and forms to help small businesses get paid on time!

(James Leckie)

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Reach more customers at zero cost
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Whenever I ask a fellow small business what they need more than anything else, the most common reply I get is, "More customers". It seems that we can all do with another customer or two but finding them isn't easy.

The marketing budget doesn't stretch as far as we'd like it to and the cost of advertising to a wider audience is often too big to bear. But there are some zero cost ways for you to cast your net wider.

Online directories can be a great source of new business. Listing your business in directories helps people to find you, when they need you.

Take a chauffeuring service for example. It's difficult to advertise this service cost-effectively because it's impossible to know when exactly someone will need a chauffeur. But if you make sure your business is promoted in the places where people look when they do need that chauffeur, then the phone will ring with a steady flow of business.

One of the most popular online directories is Touch. They now have a site for every City in the country e.g. TouchGuildford.com, TouchLiverpool.com etc.

Every month 4 million people search for services on their network of sites. Now, not every one of them is going to be looking for hand-made jewellery in Nottingham or a camera shop in Cardiff but if you want to promote your business to more potential customers, it's an opportunity you shouldn't miss.

Touch allows you to put a basic listing on their site for free. You can add extra info to your listing with a Touch Link but the basic entry costs zip.

You can find out more about Touch and get your free listing here: http://snipurl.com/_Touch_Free_Listing

(Emyr Williams)

Financing a start up and saving money
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Before you turn to the bank for a loan, think about creative ways to finance your business without raising start up capital from external sources. Here are 10 tips for saving money.
http://snipurl.com/Finance_Startup

Small Firms Loan Guarantee Scheme - How to apply
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The Small Firms Loan Guarantee scheme (SFLG) has been in existence to enable small businesses with a viable business plan, but lacking security, to borrow money from approved lenders. The scheme is a joint venture between the DTI and the approved lenders. Here are some handy tips to guide you through the application process, and a list of what information a potential lender would expect to see from an applicant.
http://snipurl.com/SFLGS

There's no place like home - Home working tips
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Some 650,000 people in the UK have now opted out of the daily commute in return for the pleasures of working from home. However, working alone from home is not as idyllic as it may seem with feelings of isolation increasingly common. Here are 10 tips to help homeworkers
to strike the perfect balance.
http://snipurl.com/No_Place_Like_Home

Why contracts for IT services are important
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It could be argued that there is a large proportion of the business sector which fails to place adequate emphasis on the need to have a thorough contract in place when conducting business either in the information technology sector or over the World Wide Web. Contracts should be implemented and thoroughly constructed regardless of the subject matter or sector. There are a number of points which need particular attention when drafting an I.T contract.
http://snipurl.com/IT_Contracts

SEO Duplicate web content penalty myth exploded
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The "duplicate content penalty" myth is one of the biggest obstacles I face in getting web professionals to embrace reprint content. The myth is that search engines will penalise a site if much of its content is also on other websites.

Here, author Joel Walsh explains why this myth is invalid, and how reprint articles can help drive traffic to your website.
http://snipurl.com/SEO_Myth

Section 660 Arctic Systems at the Court of Appeal
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The Arctic Systems landmark Section 660 tax case against HM Revenue and Customs was heard at the Court of Appeal in London on 29 and 30 November 2005. The decision, which will determine the tax position of "husband and wife" companies, could be made as soon as Christmas 2005.
http://snipurl.com/Arctic_COA

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BUSINESS BARCLAYCARD - FOR SMALL BUSINESSES
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Every Business Card issued on your account comes with a range of card features and benefits including specially negotiated discounts and services.

For a great way of keeping track of your small business expenses, why not apply for a Barclaycard charge or credit card today.
http://snipurl.com/Barclaycard

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Small Business News
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25% of SME owners plan to sell, but for how much?
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One quarter of the nation's small to medium-sized business entrepreneurs plan to throw in the towel and sell-up in the next three years. But almost half these people have no real idea what their business is worth, according to research by the Tenon Forum, an independent think tank of entrepreneurs.
http://snipurl.com/SME_Owners

Turner Report - a tax too far for small businesses?
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Following on from our article, "Higher retirement age could harm small businesses", our favourite newspaper, The Times, has published a good summary of the impact the Turner Report may have, together with small business reaction to the proposed hikes in the retirement age.
http://snipurl.com/Turner_Report

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CLASSIFIEDS
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SEE YOUR AD HERE
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Business121 is read by over 12,000 small business owners every week. You can book an ad here for as little as £30. Our final 2005 issuewill be going out next Tuesday 13th December, with the first 2006 issue due for publication on 10th January 2006. Just email: Classified@Business121.co.uk for details