Saturday, May 18, 2024

Mastering Payment Expectations: Strategies for Smooth Transactions

Now, onto the House Chronicles. This morning, I signed all the final documents at the bank for my military surplus home purchase. And guess what? The bank's appraisal came in at $104,000, while I'm only paying $83,000 for the house. Watch the video here:


That's a tidy $21,000 in equity right off the bat. And with the neighborhood stabilization thanks to new purchases, the value is likely to climb even higher. It just goes to show the power of patience and perseverance in real estate.


But onto the main topic for today: setting payment expectations with customers. It's a crucial aspect of running any business, yet many struggle with it. Take, for example, a company I've been advising that primarily serves contractors. For years, they've been sending out invoices with vague payment terms like "due upon receipt," leading to an average wait time of 40 days for their money.


Since I've been working with them, we've revamped their invoicing strategy. Now, their invoices clearly state a due date within 30 days, with a 2% penalty thereafter. This sets a firm expectation in the customer's mind about when payment is expected. But that's not all—you can also incentivize early payment. Offering discounts for prompt payment or encouraging credit card payments can speed up your cash flow.


For businesses dealing with large corporations, consider accepting electronic fund transfers (EFTs). Not only does this streamline the payment process, but it also eliminates delays associated with checks.


Another tactic is to set a payment policy. Whether it's a minimum threshold for checks or a strict "no accounts under $X" rule, establishing clear guidelines can help manage expectations and reduce outstanding receivables.


By implementing these strategies, you can shorten your days sales outstanding (DSO) and improve your cash flow. And if you want to dive deeper into cash flow management, check out my book "Credit Card Advantage," which is packed with tips on leveraging credit cards to optimize your finances.


Be sure to never miss any of my new content by joining my email list at https://www.DavidCBarnettList.com 


Download my FREE checklist for setting up payment and credit terms for your small business. Click Here!


Cheers!

David C Barnett


Friday, May 17, 2024

Great conversation with the How2Exit Podcast Show with host Ronald Skelton

E214: Guiding Entrepreneurs: David Barnett's Comprehensive Approach to Buying and Selling Businesses


In the latest How2Exit podcast, host Ronald Skelton welcomes back David Barnett, an expert in small and medium-sized business transactions. They discuss the risks of over-leveraging in business acquisitions and offer insights on mastering business deals without financial pitfalls. Barnett shares his knowledge on proper business leverage, the impact of SBA interventions, and the challenges of buying a business with minimal down payment. He contrasts debt-equity structures in large companies with the small business sector and emphasizes prudence, long-term planning, and cash flow management for successful business purchases.

Wednesday, May 15, 2024

 


***New Video Alert!

This week we discuss gift cards.

What are they? 

How should they be recorded?

What other questions to ask?

How do people get ripped off when buying a business that sells gift cards?

Learn more by watching this week’s video: https://youtu.be/DQXomD8aqCA 


Cheers


See you over on YouTube

David C Barnett


Monday, May 13, 2024

Live Does your small business need big B2B marketing? Sarah Noel-Block


Does your small business need big B2B marketing?

New Livestream guest- Sarah Noel-Block

I’m happy to have Sarah join me on a live broadcast.

She’s the genius behind Tiny Marketing. A content-marketing company that helps B2B businesses build authority and generate opportunities with the least amount of hassle and work possible.

Tune in and as we’ll be discussing marketing strategies for companies with marketing teams of 0-2 people.

Yup, Zero.

This is a ‘must see event’ for anyone thinking of being in business that sells to other businesses.

Be sure to join live so that you can ask questions, replay will be available.

Set yourself a reminder on YouTube here: https://youtube.com/live/SoXs70Tjz4s 

We’ll be going live May 13, 2024 at 12 Noon Eastern and 1 PM Atlantic Tine

See you there!

David C Barnett


Saturday, May 11, 2024

Creative Financing in Business Transactions: A Tale of Vendor Financing and Credit Cards

I’m here to share a fascinating anecdote from the world of small business transactions. Watch the full video here:


Picture this: a retail store is up for sale, with an asking price of $150,000. After negotiations, the buyer and seller settle on a price of $130,000.


Now, here's where it gets interesting. The terms of the deal stipulated that $100,000 would be paid on closing day, with the remaining $30,000 plus interest to be paid over the course of a couple of years through vendor financing.


But here's the twist: on closing day, the seller had about $55,000 in payables. So, what did the buyer do? He asked the seller to hold off on paying her suppliers and bring all the payables to the closing day.


A few hours before the appointment to finalize the deal, the buyer and seller sat down together. Armed with his credit card, the buyer proceeded to call all of the seller's suppliers and paid off the $55,000 worth of bills.


As a result, when the transaction actually occurred, the buyer only had to pay the remaining balance of about $45,000. Essentially, he had put $55,000 of the business purchase onto his credit card.


From the seller's perspective, it was an asset transaction, so she kept the cash in the bank along with the receivables and payables. The buyer's credit card maneuver had zero effect on her.


But for the buyer? Well, he shared with me that he racked up enough airline points for a business class flight to California. Talk about turning a business deal into a rewarding travel experience!


Cheers!


David C Barnett


P.S. Make sure to never miss any of my new content by signing up for my email list at https://www.DavidCBarnettList.com 


Wednesday, May 8, 2024

 


***New Video Alert!

What are finance strategies?

What is profit?

Why would a small business want to maximize it?

Not all do.

This week, a deep dive into the three groups of businesses, what performance metric they’re trying to maximize and what kinds of strategies will deliver the goods.

Learn more by watching this week’s video: https://youtu.be/d9UlF3zJ9V0 


Cheers


See you over on YouTube

David C Barnett




Monday, May 6, 2024

Live - Serious Small Business Market Intelligence.

 


Serious Small Business Market Intelligence.

New Livestream guest-> Nunzio Presta

I’m happy to have Nunzio join me on a live broadcast.

Nunzio has leads the team at BuyAndSellABusiness.com 

Tune in and as we’ll be discussing data, facts and observations from the point of view of someone who sees the smallbiz buy/sell playing field.

This is a ‘must see event’ for prospective buyers and sellers of small businesses.

Be sure to join live so that you can ask questions, replay will be available.

Set yourself a reminder on YouTube here: https://youtube.com/live/QVE_39HJ5dw

We’ll be going live Monday May 06, 2024 at 1pm Atlantic Time and 12 Noon Eastern Time

See you there!

David C Barnett