NEW CUSTOMERS

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Since you cannot change his pay practice, find out what it is. You do this in two ways. Fiist, you ask him. Second, you verify what he has told you. Rather than blurt out, "How fast do you pay your bills?" use some tact. Start out by asking if he has a preference as to when you bill him. If your customer is a one-man operation, perhaps his mortgage payment is due on the first, so it is better for him if your bill is due two weeks later. With a large contractor/customer, they may put bills through for payment on the 5th and 2fth, so you should bill on the lst or l5th. A discussion of when they prefer to be billed and how often (monthly, twice a month, etc.) easily leads to whether they want two copies of your bill or four copies, who has to approve it for payment, and when it will go through.

Nobody will object if you start out asking how you can be cooperative and then lead around to finding out when they pay. Take notes on what you have learned, especially number of copies, who approves your invoice (and who takes over when he is on vacation), etc. Then adjust your procedure accordingly. Adjust your price if it means extra work, and stack the cards in your favor. It is frustratingand foolishto do otherwise.

During the same meeting find out the names of some of his other suppliers. A bit of dissemblance is useful and does not put your new customer on the defensive like asking him for references. Definitely do not ask him what bank he uses. What you want to know is the'rnrao,gf some suppliers. But don't ask for references. Instead use some subtlety.

If your new customer is very small, look around. Admire his auto. Ask where he bought it. That can easily lead into a criticism of new+ar service problems and you can ask who does his service work and how happy he is. Did he lease the car or buy it? When you are done you know the name of one or two suppliers. Ask him who does his electrical and plumbing work. Call a couple of people he does business with. Perhaps they work on cash, so you pull a blank. Getting real data on a small, new business is often difficult.

If you have difficultyor anticipate ityou do not have much choice except to decide, in advance, your "gamble limit." With a brand new customer, suggest (tactfully) that he pay every two weeks until you "get acquainted." Set your prices or carry charges high enough to offset the loss from an occasional no-pay customer. You will doubtless collect anyway, but you can control your loss by limiting the credit you extend before a new customer has developed a paying pattern, and by shutting off sales the day his check is past due. When you get paid, resume the service.

Most small-contractor customers operate on the cash flow of the paycheck and most of your customers will be paid on the l5th and 3fth. To present a customer with a "Pay me right now" invoice on the lfth of the month is deliberately creating ill will. Never'expectanybody topay in less than two weeks.

An obvious exception is a creditcard sale. If you do business with individuals, you definitely should look into this. It is the same as instant cash for you, but the customer does not pay for over a month and can let it ride if he is short of cash because of

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