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- The Pandemic Recession Calls for a Whole New Collections Playbook
- How to Start an E-commerce Business: An Easy Guide to Getting Started
- How Startups and SMBs Can Craft an IP Protection Strategy That Works
| The Pandemic Recession Calls for a Whole New Collections Playbook Posted: 07 Jan 2021 01:21 PM PST  Back in 2008, a housing crisis and the ensuing financial meltdown led to a recession worse than many businesspeople had ever seen. It took most of the following decade for many of them to recover. But in 2020, the COVID-19 pandemic created a situation that's both worse and more unpredictable. Wave after wave of mandated shutdowns and operating restrictions have crippled cash flow for businesses in almost every sector. On top of that, the uncertainty over what will come next and when the crisis will end has made planning for the future all but impossible. That bottom-line chaos is having a ripple effect that threatens the survival of even the most previously rock-solid companies. The reason the current situation is so challenging is that each business or individual facing a cash crunch ends up delaying or missing payments on invoices and debts owed to other businesses, creating an exponential chain reaction of potential losses. In ordinary times, a business might have one or two outstanding customer invoices in arrears – but now it's facing mountains of them. Since it's clear that simply asking for payment isn't going to work (because customers can't pay money they don't have), cash-strapped companies will have to switch up their collections playbook to survive. Here are some tactics they should consider implementing as soon as possible. 1. Begin with customer outreach.Right now, businesses have to recognize that things are tough all over. The vast majority of customers who have missed payments haven't done so willfully, but out of necessity. They're managing their cash outflow and sorting their priorities just as your business likely is. For that reason, a significant number of them will respond well to a bit of empathy. To show it to them, conduct an outreach campaign for customers with outstanding bills. Treat them as you would your best customers when they miss a payment. Make an effort to understand their situation, while still letting them know they're imposing hardship on your business. The most important thing is to be direct but not pushy. Even if it doesn't result in the customer paying what they owe, it at least gets the debt on their radar, which improves the odds that they'll pay as soon as possible. 2. Offer more favorable payment terms.Although it's not something most businesses want to do, sometimes it's a good idea to offer customers (even ones with overdue invoices) more favorable payment terms to encourage them to pay their bills in a timely fashion. The most popular and effective way is to do away with the ubiquitous net-30 terms that most businesses insist on and instead offer something with an incentive built right in. One good option is an arrangement of 2/7 Net 14. That means the customer has 14 days to pay the invoice from the date it's issued, but they get a 2% discount if they pay it within seven days. This arrangement works well for two reasons. First, the potential for savings is a powerful inducement for the customer to pay their debt as fast as they can. Second, according to accounting platform provider Xero, giving customers two weeks to pay an invoice leads to the lowest number of overdue days on average. Depending on the nature of your business, it can also be helpful to attach a late payment fee to any overdue invoices, which is a further incentive for customers to pay what they owe. Combined with a discount for quick payment, this will come off less like a punitive measure and be less likely to prompt backlash from customers. 3. Consider an invoice-backed line of credit.Under normal circumstances, a well-run business wouldn't have to use debt to finance day-to-day operations. But 2020 has been about as far from normal as it gets. Now is one of the few times when it might make sense for a business to secure an invoice-backed line of credit from their bank. (This assumes that the business has a stellar credit history, clients with a strong track record of paying their bills, and a preexisting relationship with a bank, because finding a willing lender right now is no easy task otherwise.) Note that an invoice-backed line of credit and invoice factoring aren't the same thing. You should avoid the latter for now, because it would put the responsibility of collection on the factoring company, which might alienate customers at a time when keeping customers (even late-paying ones) is vital to long-term recovery. 4. Use a collections agency as a last resort.Because the current economic conditions are so dire, it may be tempting to turn over unpaid invoices to a debt collection firm, in an effort to secure a quick cash infusion. In almost every case, this is a bad idea right now. First, there's the fact that a fragmented government response to the pandemic has created a minefield of restrictions on debt collection that vary from state to state. Also, what appears to be a short-term solution can do lasting harm to the business that opts for it. Many of the outstanding invoices that get sent to collections are probably going unpaid because the customers, through no fault of their own, have no means to pay them. So, sending them to collections will only make their situation worse, and will likely cause the customer to cease doing business with you going forward. You'll then lose out on not only the full payment of the debt, but any future purchases those customers would have made when conditions improve. In other words, using a collection agency may keep you afloat today and seal your fate tomorrow. Looking at the situation realistically, if your business is that close to the precipice now, there may already be little hope of getting back to where you were before the pandemic. The bottom lineFinding a way to collect on outstanding invoices and keep cash coming in may be the difference between survival and closure for businesses. Although that's a tremendous pressure, it's critical to remain as patient as possible with your customers. That means taking the time to communicate and empathize with customers, and providing as much flexibility as possible when working out terms with them. This will give you the best chance of getting results and avoiding drastic measures. After all, we're all in this together. If everyone – businesses and customers alike – looks for a path to the recovery we all want to see, it'll come all the sooner. |
| How to Start an E-commerce Business: An Easy Guide to Getting Started Posted: 07 Jan 2021 10:30 AM PST  Thinking about starting an e-commerce business and need advice on how to set up an e-commerce website? E-commerce is growing at an unprecedented rate all over the globe and is one of the most valuable industries now. This article will guide you in starting your own e-commerce business. 4 e-commerce growth projectionsBefore jumping into a business venture, you need to know what the forecast looks like. Luckily, e-commerce shows no signs of slowing down, as these statistics bear out:
Why people prefer e-commerceTechnology makes the experience more convenient for the customer, but that's not all.
As you see, it's a great time to start an e-commerce business, but starting an e-commerce store and building an e-commerce website is a time-consuming process. You may feel overwhelmed with so many e-commerce solutions, choices and tons of information out there. To help you get started, we have prepared a quick guide on how to start an e-commerce business. 6 things to consider when starting an e-commerce businessFollow these six steps to set your store up quickly and start earning money. 1. Identify the right product.The first and most important decision that you have to make is what you are going to sell. You have to do keyword research, find out what products are popular on other marketplaces, and brainstorm product ideas that people need and are willing to buy. You should choose a product that has low production costs but a high perceived value. Find gaps in the current market and think about your unique value proposition. And think about how you are going to obtain your products and find suppliers. 2. Choose the business model.E-commerce businesses can use a variety of business models:
When choosing your business model, consider the type of product and think of what will work best for what you do. 3. Make a business plan.To make a solid business plan and achieve e-commerce success, you need to create a road map. Follow these quick steps to build a successful business plan:
4. Name your business.Choose a simple name for your business that will stick in people's minds. Simple business names are memorable, easily marketable and strong. 5. Choose a domain name.Think about a domain name that is related to your business. Brainstorm phrases that tell people about the products you are going to sell. Make sure your domain name is easy to spell. You also don't want something that's confusing or that could send them to a competitor if entered incorrectly. 6. Build your e-commerce website.You need a few things to build your e-commerce website. To start with, you need to purchase your domain name. You'll also need to choose an e-commerce platform. You also need to create product pages with beautiful photos of your products and catchy product descriptions. This will help capture the value of your product and drive prospective customers to buy. Your website needs to include a few essential "core" pages outside of the homepage and your product pages. You need an About page, where you tell your customers what you do. A blog is also great for sharing useful articles, news and updates. Finally, you'll need a Contact Us page populated with contact information to help customers reach you. You'll also need to choose a payment gateway and connect it with accounting and shipment software. How to build an e-commerce websiteNow that you know the basic steps of starting an e-commerce business, let's discuss how to build an e-commerce website. If you want to start a small retail business, there is no need to build an e-commerce website from scratch. These days, you can save time and money by joining an army of sellers on eBay or Amazon. Or, you can use specialized platforms that help business owners build an e-commerce website. You will need to spend time comparing different options available to you in order to decide which platform will power your store. Choose the right platformAn e-commerce platform is a technology that allows you to build your online store. You can choose from two categories: hosted and self-hosted. Hosted website platforms, like BigCommerce or Shopify, are ready-made solutions that take care of hosting and server maintenance for you. If you lack technical skills but want to build your store yourself, you can choose these solutions because they are user-friendly. Plus, many of them have drag-and-drop capabilities. This makes getting started even easier. There are different templates, and popular hosted e-commerce platforms come with a lot of built-in features to help you manage your store. The features include inventory management, sales processing, basic marketing and reporting features. You can also customize your store using different apps. But hosted solutions have their own disadvantages and may pose challenges to businesses as they grow and want to build their repeat clientele. These drawbacks include the following:
To scale your e-commerce store so that it can handle lots of customers without crashing, you may be better off working with tech consultants to help you build your e-commerce store. If you want more flexibility and better customization, self-hosted solutions are a better choice. You get more control over the look, feel and functionalities of your e-commerce website. Just remember, you'll need to host, implement and maintain your store yourself. Advantages of open-source platforms
Design your storeOnce you have chosen the platform, you need to design your store. With popular open-sourced platforms, you can choose from a wide variety of highly customizable themes. Choose a beautifully designed theme that will represent your brand and will allow you to showcase your products in the best possible way. Developers will install your theme and customize it to ensure that your store will look professional. Set up paymentsTo accept payments from your customers, you need to integrate secure payment gateways. Integrated payments allow your customers to enter their payment information without leaving your store. This makes the checkout experience smoother. As a result, you'll reduce shopping cart abandonment. The good news is that the majority of payment gateways can easily integrate with different e-commerce platforms. But first, you will have to set up a secure checkout process and purchase an SSL certificate to encrypt your customers' credit card information. You'll also need to create a return policy and a privacy policy, and you need to decide what shipping and delivery methods you will use. Don't forget, you need to provide all this information on your website so your customers can access it. A lot of payment gateways support credit cards, but if you are planning to accept cryptocurrencies, you may need to conduct additional research to ensure that your payment gateway supports them. Set up the checkout processShopping cart abandonment is a big problem for e-commerce in general. An average online store can lose over 75% of its sales to abandonment. You can avoid it by taking measures to improve your checkout process:
Integrate with analytics solutionsTo track and measure the performance of your store, you should integrate analytic tools. You'll be able to gather data on your website's visitors and their activity to get actionable insights for the planning of your marketing campaigns. These analytics can help you improve your site and product pages. You'll also be able to improve the order process, offering your customers a pleasant customer experience while increasing sales. Platforms to considerChoosing the best open-source e-commerce platform for your store is not easy. Each one has strengths and weaknesses. Two platforms you may want to research further are Magento and Drupal. WordPress easily integrates with numerous third-party extensions and apps, including an e-commerce plugin called WooCommerce. WordPress CMS is flexible and SEO-friendly. It allows for handling the most complex payment models. |
| How Startups and SMBs Can Craft an IP Protection Strategy That Works Posted: 07 Jan 2021 09:00 AM PST  These days, many startups and small businesses make their money from innovations they've developed to disrupt existing markets. And for that reason, they also have a big, invisible target painted on their backs. Why? They represent a threat to their more established, often larger competitors. That's why they need to take steps to establish a comprehensive intellectual property (IP) strategy to protect their most valuable assets in the earliest stages of development. The challenge is that startups and small businesses don't always have the resources to use every possible kind of IP protection available. However, small business owners can do a decent job of protecting themselves if they know how to create an IP strategy that leverages the right types of internal protections and external controls. To help businesses protect their valuable IP from theft and misappropriation, here's a step-by-step guide to creating a multifaceted and effective IP protection strategy: 1. Identify and catalog existing intellectual property.Before a business can act to protect its IP, it must first know what IP it has to protect. Although this might seem obvious, it's a step that many startups and small businesses either get wrong or fail to do entirely. This isn't because they're not trying, however. It's because the very concept of intellectual property can seem vague and elusive. According to the World Intellectual Property Organization, the term is defined as: "Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce." And by that definition, nearly everything a business creates can be a form of IP. But for the purposes of an IP strategy, the important things fall under four categories of protection are:
At this stage, it's more important to try and document as many instances of IP as possible. If there's any confusion over what is or isn't IP, questionable items may be documented separately for later clarification. 2. Set IP protection priorities.Once there's a clear picture of what IP the business needs to protect, the next step is to determine what IP is most deserving of protection. This is necessary, because most startups and small businesses have budgetary constraints that limit how much formal IP protection they can afford to protect. And because IP attorneys are among the highest paid in their field, this step is necessary to use their resources wisely. The simplest rule of thumb to follow at this stage is to first sort the business's IP into two categories: revenue-producing and passive. Next, sort the revenue-producing list into an order that reflects the ongoing development stages of the business. In other words, the first IP to target should be what's valuable to the business right now, followed by things that will have greater value later on. 3. Add IP and confidentiality clauses to employment agreements.Although it's not pleasant to think about, a business's IP is most likely to be stolen by an insider or a former employee. Even when it's not deliberate, many cases of IP misappropriation arise from improper disclosures by authorized employees or business partners. In that light, it's a must for businesses to codify employee responsibilities regarding confidentiality and IP protection right in their employment agreements. Here again, however, businesses have to rely on experienced HR professionals and attorneys qualified in labor law to craft provisions that are both comprehensive and enforceable. For a good start, though, there are voluminous samples available to use as a boilerplate, to be adapted to the business's specific circumstances. And beyond that clause, it's also vital to spell out ownership of the work employees produce within every employment contract. Employment clauses surrounding IP are of limited use, simply because they rarely provide remedies that can make up for lost or compromised IP. But they at least provide the business with some recourse if an employee fails to live up to their obligations. And they also serve as a deterrent for employees who would try to steal their employer's IP. 4. Craft an IP ownership agreement for founders and principals.In many cases, businesses launch based on preexisting IP that founders and principals bring with them into the venture. When that happens, they have the option of either transferring ownership of that IP to the business or retaining it themselves. Either way, it's an arrangement that needs to be spelled out in a binding legal agreement. Most of the time, this happens at the time the business is incorporated. In some cases, due to inexperience or a lack of legal advice, it gets overlooked. In most cases, founders opt to transfer ownership of their IP to the business. And this is a step that's almost always required as a condition of investment by venture capital firms or other early-stage financial contributors. 5. Hire an IP lawyer to handle the required filings.The final step is to find and hire an IP lawyer to act on the priorities decided earlier in the process. They'll know how and when to file for the correct legal protections needed for the company's critical IP. And if there are financial constraints involved, they'll make short work of confirming the order of operations the business has decided upon. The good news is that having done so much preparatory work, the legal fees resulting from this process won't be as overwhelming as they otherwise would be. This is because the majority of IP lawyers expect they will be one who has to complete all of the previous steps. By doing the legwork themselves, business owners can maximize their limited resources by spending them only on getting the real legal protection their IP needs and deserves. The bottom line here is that startups and small businesses have a vested interest in making sure that their valuable IP remains under their control and isn't exploited by anyone else for gain – monetary or otherwise. And although many put off doing it because they fear it's either too complex or too expensive, it's an effort that's absolutely worth making. By creating a multifaceted IP protection plan by following the steps outlined here, they have a viable path toward doing so. What's more, this approach helps minimize the bottom-line impact that IP protection often carries with it. It delivers maximum bang-for-your-buck results. Using this strategy, every startup and small business can afford to keep their IP safe, and ensure that they'll continue to profit from it over the long term. And that's a pretty decent foundation to build upon for long-term success in crowded and often cutthroat markets. |
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