A few years ago a friend of mine who is a business consultant advised me - after listening to my complaints about the sign business and cash flow - to offer my clients various payment options. His advice was this:
1) Price it one way with the standard 50% deposit - balance due on completion
2) A different price if the whole thing was to be billed and paid later (corporations are notorious for this - "Our billing process won't allow that" WAH! WAH! - Cry-babies)
3) Offer them a 5% discount for prepaid work. Note: mark it up 5% before you state the price.
Similar to Mike Jackson's long-held idea of 3-tier pricing, you now have another option for payment. The clients love it!!!! At least ours have.
How much do they love it? Let me put it this way, we have done just over $175,000 for the year so far (through today - I need more though!!!). Anybody want to guess how much of that was prepaid?
$96,910.00 of it. How's that for using someone else's money?
Granted, one job was for over $60K - but that is still over $35,000.00 in prepaid work in a 'normal' year. Cash flow has never been better (until recently that is - why the slowdown? who knows??!!) We just signed up another account the same way today - almost $4,700.
True, you can get caught short of cash sometimes - but you can easily make it up if you are making a profit. Document your time, people!! We do a daily time sheet for every job we work on and look later at what is profitable - and what is not. Get rid of the dead wood!!!
But please try this once to see if it works for you. Those with extra cash now see this as a buyer's market - and here's your way to get in on it. It's all about the psychology of the 'buyer'.
Good luck!!
-------------------- Jay Allen ShawCraft Sign Co. Machesney Park, IL jallen222@aol.com http://www.shawcraft.com/
"The object of the superior man is truth." -Confucius Posts: 1285 | From: Machesney Park, IL, USA | Registered: Nov 1998
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sounds great - I'm in! easier said then done when it comes to breaking old habits or developing new ones, but this one sounds well worth the effort.
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I have always done that with a certain client of ours. Give them a 2% discount for cutting the check within 10 days only I add the 2% to the price beforehand. If I know they will be paying with a corporate card, I add 3%. If you don't do this, they will not cut the check for 45 days.
-------------------- Wayne Webb Webb Signworks Chipley, FL 850.638.9329 wayne@webbsignworks.com Posts: 7405 | From: Chipley,Florida,United States | Registered: Oct 1999
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....do you ever feel the urge to answer the phone... "WHAT DO YOU WANT"
-------------------- Jane Diaz Diaz Sign Art 628 W. Lincoln Ave. Pontiac, Il. 61764 815-844-7024 www.diazsignart.com Posts: 4102 | From: Pontiac, IL USA | Registered: Feb 1999
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An even better way to earn more, faster, is for shops that don't accept credit cards to start accepting them so you can take advantage of impulse buys and increase your "turnovers" or "conversions".
When you're dealing with companies that have money, "discounts" for prepaid jobs works but there are times when you'll get a new business owner that is so close to opening his doors but has been nickel and dimed to death til his wallet and checking account have been sucked dry. Trust me, you do NOT want this guy on 15, 30, 45 day terms because you won't get paid. He may however, have a credit card that has some balance left on it. Cha-Ching! Now you don't have to let him walk out the door without shaking him down a little to get a job started.
Plus, these days almost everyone has an ATM card that functions as a debit card, taking money straight from their checking account. If you can accept credit cards, you can also run their debit card through the same system so it's even more convenient.
My sales have gone up dramatically since I started accepting credit/debit, in both volume and the size of the sale. Snag that impulse buy when they're ready to spend it, don't give them ANY time to re-think their purchase or the chance to go to someone else that *does* accept credit cards.
-------------------- "If I share all my wisdom I won't have any left for myself."
Mike Pipes stickerpimp.com Lake Havasu, AZ mike@stickerpimp.com Posts: 8746 | From: Lake Havasu, AZ USA | Registered: Jun 2000
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Mike, my wife and have been thinking of getting hooked up with taking credit cards. I am going to show her your post I think it makes a lot of sense.
-------------------- Dennis Raap Raap Signs Posts: 840 | From: Coopersville, MI | Registered: Feb 2003
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"WHAT DO YOU WANT"
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