LoudounPreneur entrepreneurial newsletter
 Information for the Innovative, Enterprising and Brave
June 2014

How to Get Clients to Pay

As an entrepreneur, you're excited about the product or service you've created. You're thrilled to have a growing number of customers. Money is coming in, but you haven't put a system in place to formally track who owes you how much, and by when.

 

This is where a lot of small businesses get into trouble. Without effective strategies in place to make sure your clients pay you on time, you could be setting yourself up for a cash flow problem. Your business could quickly go off track by having more money going out than coming in. You could be putting yourself in the position of having to spend your time chasing after customers who promise to pay, but never do. 

 

In order to free up your time so you can focus on growing your business instead of on delinquent clients, use these nine tried-and-true strategies offered by business experts and successful entrepreneurs. 

  1. If a project has a hefty price tag, run a credit check on the client before you start work. Equifax, Experian and Cortera all offer credit monitoring tools for small businesses. Checking out a client can cost less than $200, and save you lots of time, money and headaches.
     
  2. Put payment terms and conditions in writing every time, with every client. Do not make exceptions for friends or relatives. Consider stating up front the consequences for delinquent payments, and always follow through with whatever terms you set.
     
  3. Use a standard invoicing system. Always work off of an invoice and never from a note,  email or verbal agreement.
     
  4. Get paid as much as possible before you do any work for a client. It's common practice in some industries to get paid 50 percent up front when the client signs the work order or contract, and the remaining 50 percent when you deliver the product or service.
     
  5. If at all possible, have a policy of only accepting credit card payments instead of checks.
     
  6. If you don't have an employee to handle accounts receivable, hire a virtual assistant to call clients when payments are due. Always have him or her follow up the calls in writing. VAs usually only charge $10 - $15 per hour.
     
  7. Turn up the heat on clients who are 30 days past due. For a small fee, companies like Dun & Bradstreet Small Business Solutions, Transworld Systems and I.C. Systems will make calls or send a series of letters to delinquent clients.
     
  8. Consider turning delinquent accounts over to a collection agency. Keep in mind that agencies usually keep 50 percent of whatever they collect for you.
     
  9. Depending on how much they owe, you can sue the client in small claims court for the amount owed. 

You can avoid spending a lot of time and effort on collections by having the right policies and procedures in place up front. Understand that you deserve to get paid on time for giving customers products and services that benefit them. Put systems in place that will encourage clients to take your invoices seriously. This will help you avoid the cash-flow problems that derail so many startups, and instead of chasing delinquent customers, you'll be able to spend more time doing the work you love.

 


Loudoun Small Business Week Supports the County's Entrepreneurs

During this year's Loudoun Small Business Week, hundreds of participants learned strategies and made contacts that will help their businesses grow. More than a dozen events offered training and networking opportunities for entrepreneurs, and members of the Board of Supervisors made personal visits to a wide range of successful small businesses across the county during that week. More than 850 people participated in this year's activities.

 

One of the high-profile events this year was the iNNOVATELoCo tech pitch competition held at AOL Fishbowl Labs. Six Loudoun startups pitched their product or service to a panel of tech business experts. Morgan Wright from SafeLife won the $1,000 grand prize, along with a package of legal assistance from the law firm Holland & Knight, and credits toward a membership with the Mason Enterprise Center. These two items were also awarded to 2nd-place winner Eugene Evans of GoPopTV, along with a $500 prize.

 

Entrepreneurs working to start or grow a farm business were the focus of a unique event held at the Alamo Drafthouse in Ashburn. A sold-out crowd watched the film "Farmland: The Movie" by Oscar-winning director James Moll, and stayed for comments by a panel of successful farm business owners Doug FabbioliCarl LindgrenTerri Young and Molly Kroiz.

 

Small Business Week is just one way the Department of Economic Development helps Loudoun entrepreneurs. The department wants to do as much as possible to grow Loudoun startups into bigger businesses. We help people make strategic connections and learn useful information about how to form, operate and expand their companies. We do that in a concentrated way during Small Business Week, but that's our focus all year long.

 

"Every event during Small Business Week offered a useful take-away for each participant," said Loudoun Business Retention Manager Chris Hunter. To find out about upcoming events for Loudoun entrepreneurs, or for help with growing your business, contact Chris at 703-777-0426.

  

Look Before You Leap

Raising capital is job #1 for startups. Instead of pursuing loans or grants, or borrowing money from friends and relatives, or even (bad idea!) raiding their retirement funds, lots of entrepreneurs are turning to crowdfunding platforms like Kickstarter and IndieGoGo. Doing a little homework before you jump into the crowdfunding pool will help make your campaign more successful. Here are some things you need to know to raise money online.

Up Skill: Events and Training

1 Million Cups

Join us for six-minute presentations from Loudoun business owners. Engage in peer mentoring by giving the presenter the benefit of your knowledge and experience in resolving business issues and making companies grow.

Date:     June 11, 18 and 25, 2014

Time:     9 to 10 a.m.        

Place:    Mason Enterprise Center, 202 Church St., Leesburg

Cost:      Free, find out more online

 

Selecting the Right Busines Entity: How to Make Your Business Work for You

Tax Attorney Keith Troxell will review and compare the legal, tax and business aspects of sole proprietorships, C and S corporations, partnerships, and LLCs.

Date:     June 19, 2014
Time:     6 to 8:30 p.m.
Place:    Mason Enterprise Center, 202 Church St., Leesburg

Cost:      $25 online; $30 at the door

 

A Contracting Officer's Top 10 Proposal Preparation Tips

Regardless of your experience with the federal government, this event can help you move forward on your contracting goals.
Date:     June 24, 2014
Time:     5:30 to 7:30 p.m.
Place:    Mason Enterprise Center, 202 Church St., Leesburg
Cost:      Free, please register in advance

 

Northern Virginia Tech Breakfast

Entrepreneurs, techies, designers and developers learn from peers through show-and-tell and case-style presentations. 

Date:     July 2, 2014

Time:    8 a.m.

Place:   AOL, 22000 AOL Way, Dulles

Cost:     Free; register online

 


Be a Winner

Forbes magazine says there are 11 movies entrepreneurs should watch. Write in and tell us which of those 11 films you've seen, and the business lesson you think it teaches. A winner will be chosen from entries received by this Friday. You'll win a bottle of fantastically delicious maple syrup aged in Catoctin Creek whisky barrels. We'll also include a link to your business in the next newsletter. One entry per contestant; email your submission to: LoudounBiz@Loudoun.Gov.

Gut Check From a Guru

"Every time you state what you want or believe, you're the first to hear it. It's a message to both you and others about what you think is possible. Don't put a ceiling on yourself." -- Oprah Winfrey



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Loudoun Economic Development DC's Technology Corridor 
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