Top Tips for working for yourself: Cashing in on your services

Working for yourself is great, you have much more freedom than a conventional 9-5 and you have a bit more freedom to pick and choose your clients. While there are many perks to being self-employed there are many things you will need to deal with that you probably haven’t prepared yourself for. The most important skill you’ll need to have is being able to cash in on your services.

People don’t like letting go of their money, often making it difficult to get regular payments. This is what you need to know:

Be brave

A lot of people shy away from debt collection, they may not want the confrontation or they may feel rude asking for payment – but if you don’t ask, you won’t get! The worst thing you can do in this situation is not ask and allow your customers to receive your services without paying for them. The second worst thing you could do is cause a massive argument with the client over payment, as they will probably stop using your services. Approach them in a clear and calm manner, showing them the work you have done and remind them that they are contracted to pay you – a little patience and understanding combined with hard facts will help to wrap up this situation.

Negotiate a win-win situation

Sometimes one party will feel as though they are losing out in the deal – perhaps the work wasn’t exactly what the client asked for or the payment wasn’t enough for the work provided. These can turn into very tense and negative situations unless they are properly controlled. If you feel as though you are in the wrong then renegotiate the price they have to pay; while this may feel like a backwards step, some money is better than none!

Send an official payment request

If after initial contact the client still has not paid for your services then send them a letter requesting full payment by a certain date. While this may seem cold and forward it is likely to grab their attention as they know that you are serious. Don’t be afraid to set a due date for payment, giving them around 10 to 20 days to make the payment from the time they receive the letter – this way they won’t panic about payment but will feel the need to make a quick payment.

Invoice factoring

When this becomes a common problem it may be a good idea to take on an invoice factoring broker & service to give you a regular income. Invoice factoring gives you a certain amount of the total sum owed once the contract has been made and provides the rest, minus a small sum, once the money has been collected. Best of all, you wouldn’t have to collect the money yourself as it would become the broker’s prerogative to chase the client for the money. This can help you to maintain good relationships with your clients while getting the payments you need and deserve every month.

The Best “You Owe Me Money” Letters

If someone has ever owed you money then at some point or another you’ve undoubtedly penned a strongly worded letter asking them to pay up. Many of these are very formal and professional running along the lines of:

‘We are disappointed to find that you have not paid your bill of [x amount],
you have 10 days to pay this debt until we take further action.’

However, there are hundreds or possibly thousands of cases where these letters aren’t quite so PC and formal. In fact, some are the most sarcastic, passive aggressive, give-me-money-or-else pieces of prose we’ve ever read. Here are some of the best:

Making it personal

There’s nothing that works better than a personal approach, especially if you are a freelancer or a small company. Write them a letter by hand, detailing just how much them missing their payments affects you. Normally this will appeal to their sense of humanity and they will quickly pay up out of guilt – tailor this to your audience however, some people will not bend to your pleas.

Note: don’t try this on fictional characters:

‘Dear tooth fairy,
I lost my tooth on 23 of Oct. Now it is Nov 12. I lost my tooth in pizza. I lost both today. You owe me $1.00 not to be hard but I need money.’

(Credit: http://cdn-ugc.cafemom.com/gen/resize/282/320/80/2011/07/13/14/2w/r4/poqpbsc3y8.jpg)

Play it passive aggressive

While getting angry may make you feel better it often makes things worse and won’t be helpful for collecting debts. That being said, being passive aggressive can be worth its weight in gold. There are some brilliant debt letters out there from people needing payment, the best one we’ve seen so far is this:

‘With the holidays approaching, there is no time like the present for ‘presents.’ If you have received this email it is because you owe me money for some reason. As a ‘hassle-free’ gift idea, it would be great if you simply mail me a check for the amount you owe.’

(Credit: http://farm6.static.flickr.com/5090/5218412042_949c10cd44_o.jpg)

 

Public shaming

There’s no point beating around the bush, if someone owes you money tell them straight. If they still refuse to pay then a public shaming may be in order. There are examples of this everywhere, from family members shaming their relations with just how much money they owe to companies flagging up clients. One clever tactic was used by a web design company, harming their reputation and letting everyone know they haven’t paid by changing their homepage to a note about their failure to pay.

‘[Client name] preferred to ignore our invoices instead of paying them. As a result this website is no longer operational. We regret any inconvenience this may cause for you as a customer of [client], however it is a necessary measure in getting what is rightfully ours.’

(Credit: http://farm9.static.flickr.com/8228/8475052192_8a1a4ac854.jpg)

Being sarcastic

Sick of playing the good guy? Be sarcastic. The more outrageous the better! This is an excellent approach for winding people up until they beg you to take out invoice factoring so that they never have to be bothered by you again. However, be prepared for people to return fire with their own insanely annoying levels of sarcasm and NEVER reply to an email from David Thorne.

‘I do not have any money so am sending you this drawing I did of a spider instead. I value the drawing at $233.95 so trust that this settles the matter.’

(Credit:http://www.geekologie.com/2008/11/13/spider-1.jpg)

Get angry

When all else fails it is time to get angry. Force invoice factoring on them if they are incapable of paying on time, take legal action if they fail to pay at all and think about the bailiff approach if you continue to not see any money. Alternatively you could write them a strongly worded letter demanding your hard-earned cash to be paid up immediately or you’ll get very, very cross. The best thing you can do is stop every service you are doing for them and refuse to cooperate until they make the payment – make sure you tell other service providers just how awful they are at paying. See how they respond to that!

Top Tips for Working for Yourself: Understanding Finance Options

Working for yourself poses enough potential trouble and stress without having to constantly worry about the money side of things. You know that you need to consider it, but you need to be able to venture into new markets or expand your services in order to succeed. There are many finance options available to you; here’s what available to start-up businesses and self-owned companies:

Government funding

The UK government is working hard to regain the country’s economic stability; part of their strategy is to provide funding to individuals who plan on starting up a new business. However, many of these grants work on the basis that you are offering employment to others – although there are still schemes that help freelancers to start off. Don’t be put off if finance options from these sources don’t immediately seem to jump out at you, it may be worth contacting your local council to see what business funding is potentially available.

Business loans

Banks and building societies have a huge range of different loans available to people who wish to start up their own business. Talk to your business finance brokers to find out what different types of packages are available to you and what best suits your business needs. From buying offices and office equipment to providing funding for potential business ventures – bank loans for companies cover a huge range of needs. Thanks to the current rate of interest, you can get very affordable loans with low rates, making starting up a business or venturing into new markets very affordable.

Selling stocks and shares

If you already have a business set up and operational but you need to bring in more capital then you can have the option of selling shares in your business. While many first time business owners don’t like the idea of this, it is a great way of bringing in additional finance – just make sure that you retain 51% of your shares! If you don’t want to release your shares to the public domain then there is the option to ask friends, family or business partners to invest in your company. There are also several sources of equity funding such as ‘business angels’ or ‘crowdfunding’ where you can potentially get a large amount of funding designed specifically to help with starting up businesses, these need to be applied for directly with all your company’s details.

Take the tax breaks!

Many new businesses struggle because they aren’t aware of the tax breaks they can receive, often meaning they are spending much more than they need to be. By sitting down with a financial advisor and learning exactly what you can claim back you could potentially save yourself thousands every year! While this isn’t strictly a finance option, it is a great way to find additional cash in your business without having to go through huge changes – make your money work harder for you!

Top four uses for bridging finance

Sometimes there just isn’t enough capital readily available to you to do what you need, in these types of situations bridging finance could be the right option. Bridging finance is essentially a short term loan that gets to you extremely quickly, giving you the equity you need to do what you want.

Talk to any bridging loan broker and they will give you a list as long as their arm for what bridging loans can be used for. We know you don’t want to listen to all the spiel, so here are the top four most popular uses:

Speedy purchases

If there is a property on the market that’s going fast and you don’t have time to go through the lengthy process of acquiring a commercial mortgage then a bridging loan can be used to make the purchase. This type of financing is very quick, with the money being available to you the next day in some cases, letting you buy that quick-moving property before it disappears.

This can also be used for when you’re being pressured into buying before you’ve managed to sell your old building. In this situation you have funds tied up in your existing property which, if available, would pay for the new building – bridging allows you to make this transaction without forcing you to take the first offer you receive.

Buying land

More often than not, if you’re seeking to gain development finance to build or renovate properties you will be required to own the land before lenders will consider it. Bridging finance allows you to purchase the land, giving you additional security to acquire further financing and buy you more time to obtain a suitable mortgage.

Unlike other financing, bridging can make up 100% of the funding – regardless of the land being bought. Bridging can be used to buy land with or without planning permission or agricultural restrictions.

Bridging to development

Bridging and development finance are completely separate products, aimed at lenders with very different needs. However, a bridging loan broker knows that the two can work very well together and in some cases you may require bridging finance to gain development. Some development properties would not meet the lender’s credentials for funding as they currently stand and requiring some work to be done before they would consider it. Here, bridging finance gives the developers a chance to make essential changes, improvements and preparations needed to put together a development finance proposal that is likely to be accepted.

Renovations

Found a property that suits you to the ground, but upon the valuation you find that it is not mortgageable? This problem isn’t uncommon, especially in fix-me-up buildings or properties which have been empty for a long time. By taking out a bridging loan you can free up the equity needed to make the changes that will allow you to take out a traditional mortgage. This is also a great option if you’re planning on knocking down the building to free up the land it stands on– either to sell on or rebuild.

What is the future of retail in South Wales?

Wales is currently at a tipping point when it comes to retail, something needs to be done in order to revitalise town centres across the country. Many towns are a barren wasteland of empty buildings and charity shops, a factor that needs to change if retail is to make a comeback.

A new survey by the Centre for Retail Research has estimated that around a third of all shops in Wales are at a real risk of closure. Before we can make any suggestions as to how this can be prevented, we need to understand why retail is suffering.

Online shopping

In recent years, more and more stores have started to offer online shopping which allows you to browse a larger range from the comfort of your own home. Shops have essentially shot themselves in the foot with this move, as many regular shoppers find that there are many more benefits to making their purchases online. As a result, the high street shops see a large reduction in their sales, affecting their profit margin to a point where management have to consider closing the store down. When this happens the high street is drastically hit as there is even less incentive for people to visit when the big name shops are no longer there.

How can this be changed

Internet shopping is here to stay; however, with smart retail operations, businesses may be able to make an impact. Instead of taking out large commercial mortgages for a huge physical space, shops need to use both online and offline retail options – helping to bring foot-traffic back to town centres with ‘in store only’ offers and deals. Companies taking out commercial finance in Cardiff or Swansea for shops in the city centre can pay less for premium space as they require less footage. This is better financially for most large retailers and gives customers a greater incentive to visit their local high streets.

Changes to business rates

The Welsh Government has decided to follow the rest of the UK in postponing any changes to business rates by two years, meaning that there will be no change until 2017. Had they decided to re-evaluate the rates in 2015 as planned, we could have seen a drop of up to 30%. However, rates are still reasonably low, with commercial finance in Cardiff being taken out at the pre-recession values of April 2008. To encourage more businesses to take root in Welsh towns, the government should offer more support to retail businesses, which would eventually lead to a stronger economy.

Empty shops

As it currently stands, around one fifth of Welsh shops are empty – this is a significant proportion of the high street and something which needs to change. Many buildings are being used by charity shops who currently receive a reduced rate on rental; however, this may change as a result of a new review into business rates for charities. Unless businesses and charities start receiving lower rates it is unlikely that new companies will be seen taking out commercial finance to start up new shops, cafes and businesses.

How to find a trusted bridging finance broker

When you’ve found the perfect commercial investment opportunity, but aren’t able to source the requisite funds for a few more weeks, bridged finance can be a godsend for the fast-moving property investor.

The rates may be higher than with a commercial mortgage, but if bridged finance allows a businessperson to secure a hot property that generates revenues over the next 5, 10 or 20 years then it’s well worth the initial outlay.

But because commercial finance isn’t regulated by a Government body like the FSA controls personal financiers in the UK, securing bridged finance can often be a minefield of unethical lenders. How can you find a bridging finance broker that you can trust?

If they advise you wrong

Perhaps the surest sign of a bridging finance broker that’s in it for the wrong reasons would be visiting one who gave you the wrong advice. For instance, we all know that bridged finance is a means to the solution, not the solution itself. So if your broker encourages you to access this quick lending scheme without a viable exit strategy and a steadfast commercial mortgage, then they’re probably just advising you to get a quick, simple fee without considering your long-term needs.

If they give low timescales

Bridged finance is all about being first to the deal. Therefore, you need a commercial finance expert who knows that time of the essence – dealing with your enquiry quickly while not missing out any of the essential details incurred in such a deal.

Word of mouth

Like so many other industries, when it comes to finding a bridged finance broker that you can really trust, word of mouth doesn’t talk, it shouts. We understand that sometimes finding the best property deal can be a secretive process and you don’t want to shout about your amazing investment idea from the rooftops, but discussing the best brokers is a great way to ensure that the industry remains in good health.

No commercial affiliations

There’s no doubt that each broker will have some lenders that they prefer to work with – after all, their contacts are what make them so attractive – but there are some agents that are tied in with certain providers and will only offer you deals from that lender. So choose an independent bridged finance broker who can present to you a wide range of policies from all sorts of financial parties.

From little starts, big businesses grow

You can’t expect to have a huge, international company within months of starting up – this just isn’t a reality. However, it isn’t out of the question that your small business could become a huge sensation over a longer time period. After all, everyone has to start somewhere!

Did you know that some of the biggest businesses actually started out as companies run from the family home? Here are the 10 of the most famous start-ups that made it big!

Amazon

Now known as the largest and most trusted online retailer in the world, Amazon started off from very humble beginnings in 1994. The idea started off as an online bookstore which was run entirely from Jeff Bezos’ home in Bellevue, Washington. In under 20 years this project went from being a tiny online shop into a merchandising behemoth, selling almost anything you can think of!

Apple

This elite digital retailer hasn’t always been as prestigious as it is now. In fact, when it first started out it only consisted of Steve Jobs and Steve Wozniak who built computers in their garage and sold them to local retailers. Thirty years later and Apple is now considered the most valuable technology company there is – from small beginnings this computer giant is now everywhere.

Google

The one company synonymous with the internet was nowhere to be found before 1998, now “Google it” is a common phrase found in households around the world! This phenomenon began by being built by university students operating out of a single car garage; it quickly expanded beyond their expectations. This just goes to show that if you have a business idea and pursue it with a clever corporate head, whilst ensuring you get the best commercial mortgage, then you too could dominate an entire market.

Harley Davidson

You don’t just have to be a computer genius to make a business work; back in 1901 Harley Davidson was started from a 15-foot wooden shed in Wisconsin. This may possibly be the least likely place you’d expect a globally recognised brand to start from, but William S. Harley and Arthur Davidson made their dreams a reality. In 2013, Harley Davidson marked their £100 year anniversary, a landmark they reached with an operating income of nearly $830 million!

Lotus Cars

Another automotive achievement that started small, being built in a stables – Lotus really embraced the term Horsepower to create premier racing cars that are sought after by enthusiasts across the globe. The first ever Lotus was built using a 1930s Austin Seven and a power drill – after a bit of money came in, Chapman was able to buy in his own parts and mechanics and invest in the best commercial mortgage to move out of the stables and into a proper garage.

Yankee Candles

Probably the only brand of candles your know about, Yankee Candles came about when 16 year old Michael Kittredge melted crayons into a candle as a gift for his mother. This simple gesture got noticed by friends and family which resulted in Kittredge mass-producing candles to order. It took Kittredge four years to outgrow his family’s garage and move the company forward.

None of these businesses started out expecting to be huge, a factor that many entrepreneurs are trying to force on their company. Start out with what you know and don’t be afraid to take chances and your business may also end up on this list!

Loans continue to fall despite Funding for Lending Scheme

The Funding for Lending Scheme, introduced in August last year, was introduced by the government to increase the number of loans being offered to individuals and businesses by the banks. However, despite the scheme, the Bank of England announced that net lending fell by £2.4bn in the final quarter of last year compared with the previous three months.

This shortfall in lending has prompted Business Secretary Vince Cable to admit that the scheme may need to be “adapted”.

“It is working in some areas with some of the new banks, but it isn’t yet countering the negative trend and the very conservative lending patterns the banks in general are promoting in relation to business.”

Mr Cable will now to speak to the Bank of England, which operates the scheme, to see how it can be improved.

Official figures from the Bank of England show that, despite the additional provision of £14bn of funding to the banks, the scheme has been slow to trickle through to customers due to the time it takes for banks to scrutinise and approve loan applications.

How has the scheme affected the banks’ lending?

•    Barclays: +£1.8bn
•    Nationwide: +£1.7bn
•    Lloyds Group: -£3bn
•    Santander: -£2.8bn
•    RBS: -£1.6bn

Despite the lag in the scheme filtering through to individuals and businesses, the Bank of England believes that there has been a shift for the better, with banks lending more than they otherwise would if the scheme were not in existence.

In a bid to boost the flagging economy, at least £70bn will be made available to banks at reduced interest rates. However, the funding will only be granted to lenders if it is the UK’s small and medium-sized businesses, as well as individuals, that benefit.

The message from mortgage industry insiders is less forgiving of the banks, with brokers believing that some lenders are guilty of increasing their reserves, rather than opening themselves up to more lending. This view is supported by new figures released by the banks themselves, which confirm that lending to businesses is continuing to fall.

The British Bankers Association (BBA), which represents all the main banks, has released data which shows that lending to the UK’s four million small and medium-sized businesses fell by £382m in the last quarter of 2012 alone; although it did insist that the majority of loan applications are approved.

The BBA believes the lending shortfall is largely down to the fact that small and medium-sized businesses are sitting on large cash reserves and opting to pay off debts, rather than borrowing more.

The association also believes the media are having a detrimental effect on borrowing, with business owners becoming increasingly deterred from applying for loans by headlines which focus on the banks’ reluctance to lend.

This point has been emphatically dismissed by Liberal Democrat peer Lord Oakeshott: “That is a pathetic excuse. Many profitable, perfectly good businesses are being starved because they can’t access the lending they need.

“The reason is that RBS in particular, and Lloyds, have been aggressively shrinking their balance sheets and sucking money out of British business.”