Electric Train(er)

How to survive a recession

There's an elephant in the room during my business skills workshops these days.  Countries around the world are starting to fall into recession, but the people I meet don't seem to be thinking very hard about how this might affect them.

The media have been focusing almost exclusively on the big picture (central banks bailing out retail banks) or defaulting to dinner party economics - the fall in house prices and rise in food prices.

So if you're just starting out as self-employed what should you do? Well it's not rocket science...

Here are my top tips for weathering a recession:

1. Hang on to ready cash - don't assume you can borrow
2. If you have an overdraft imagine what you would do if the bank withdrew it overnight - something they're perfectly within their rights to do.
   
3. Make sure you know the minimum figure you can survive on - and your breakeven point
4. Try to lower your breakeven point
5. Make sure you know what your value proposition is.  Why should your clients come to you, as opposed to anyone else?
6. If others work for you, make sure they understand your value proposition too. You'll need them as your ambassadors.
7. Don't kid yourself. Be realistic.

Actually this is good business practice in any circumstances. Doubly so when times get tough.

If you have any other tips on beating a recession I'd love to hear them.

How to get paid

The thing that gets me hotter under the collar than anything else is people not being paid for work they've already done.

It's a common problem, especially for freelancers and consultants.

That's why there's legislation designed to protect small businesses. Read all about it on the Pay On Time legislation website.

You'll see that the law states you must be paid within 30 days unless you have actively agreed that it will be longer.  (And only an idiot would agree to that.)

My advice to anyone is chase a payment on the 31st day after you slung in the invoice. Use your politest voice and gently ask the accounts payable people to check your payment is going through the system. After all, they may never have received your invoice.

Give them another week - presuming they say the payment is on its way. Then call again - restraining your urge to shout down the phone. As soon as you're aggressive you'll just be put at the bottom of the pile.

I usually let them know I'll call them every day to check it's 'going through the system'. That usually unglues the payment straight away.

I'm always amazed how few accounts people know what the law is. So I usually put the following paragraph at the bottom of my invoices. You'll find it on the pay on time site:

Please note: David Thomas Media Ltd understands and will exercise its statutory right to claim interest and compensation for debt recovery costs under the late payment legislation if we are not paid according to agreed credit terms. For more information on late payment legislation please see:
www.payontime.co.uk

Good luck and don't let them get away with it.

Business advice for thesps and other freelances

I'm always on the look out for places that support one-person businesses and freelances. Working for yourself is hard enough so all tips and tricks are very welcome.

I was asked to supply some blurb for The Stage the other day, and their Dear John section is a wonderful font of wisdom.

Check it out.

Keeping track of invoices - the low tech way

There are any number of software providers who will sell you some clever widget that will alert you to outstanding payments. Personally, I prefer something simpler and much more low tech - a whiteboard.

I'm not talking about anything huge - just a small version. Mine leans up against the wall just to the right of my computer screen.

It's so handy that every time I send an invoice I simply pick up the whiteboard and add the number, the client, the amount and the date. When I get paid I just cross out that line. When I get to the bottom of the board I rub everything out and start again at the top.

See if you can spot it:

It's disarmingly simple and means I never lose sight of payments I should have received.
As for getting paid on time...that'll be the subject of another posting.

Top tip 2 - We all hate filing

One of the reason people hate filing so much is that they'd rather be doing something more exciting.  Unfortunately if you run your own business and have an office at home you can't avoid it.

The trick is to make the filing so easy that you can't put it off. Don't use filing cabinets for the stuff you need to deal with every day. A filing system that relies on unlocking filing cabinets is doomed to fail; all you will do is put the stuff in a pile on any clear surface - and leave it there.

So have a little shelf within arm's reach and keep things like invoices, receipts and current project files nice and handy.

Another good tip is to touch any piece of paper only once. Never put it in an 'in tray' to deal with later. Just put it straight away in the place that it belongs. If you're not sure where it belongs it probably needs to go in the shredder.

Any more filing tips? I'd love to hear them.

Top tip 1 - The unwanted visitor

One of the thing I love about the small business training is meeting so many people with great stories to tell.

I'll be repeating many of them here, and passing on some great tips for smoothing out the bumps of self-employment.

Here's one which was passed on by someone who'd started her new business at home after working for many years at the BBC.

She was re-adjusting nicely to being self-employed, but one thing was getting to her; her friends would see her car in the drive and assumed that she was always in for coffee.

Being a well-brought up kind of person, she found it impossible to tell her friends to get lost. They'd be in the kitchen boiling a kettle before she had a chance to explain that she was in the middle of some work. So how to diffuse the situation?

She decided to leave a file full of old papers next to the front door. Whenever the doorbell rang she'd come to the door, pick up the file and cradle it in a business-like fashion in her left arm. When she opened the door the friend would see the file and say "Oh, sorry. I see you're working now. I just wanted a coffee and a chat. So when would you like to meet?"

She reports that it works every time. She doesn't see her friends any less, but she sees them at a time convenient to her. Briliant.

Got any other tips for home working? I'd love to hear from you.