In Cash is King Part 1, I started from the very beginning. I assume most of you reading this blog have been in business a while. Sometimes getting back to basics is needed to simplify your approach. In Part 1, I presented three tips to consider when getting started: What type of accounting software to use, The importance of social media, and Why having business insurance is a must. Veteran business owners can also get back to the basics. Go back to the very beginning to make course corrections if needed.
In Part 2, We will cover more practical tips you can implement in your business that will help protect you from future losses and help generate much needed capital to keep your business cash flow positive. Let’s get started…
Take Pictures: This is even better than having an insurance policy. Take pictures of everything. As soon as you step foot in the backyard, take pictures of the pool & equipment. Take pictures of anything that may need replaced or repaired. Take before & after pictures of repairs or renovations. You can use the pictures on your website, on social media, in your store, in quotes you send to your customers to generate more business, and maybe even to save your ass.
In 2013, a property manager tried to sue us for the cost of a liner replacement claiming we had caused a sink hole in the deep end of the pool. The issue started when my company was hired to fix a pool pump with a plumbing leak at a rental lake home located in Monticello, Indiana. Luckily my guys were trained to take pictures before and after the job was complete. In the original assessment of the job, my guys had made note of the pre-existing problem with the sink hole. We planned on sending a quote to the property manager for future repairs. Soon after completing the plumbing repair, we were served by a sheriff in our store. He accused my company of causing the sink hole. It cost me $600 for my attorney to gather my information and send the property manager a letter, including the pictures. The Property Manager had sued us for $6800. Once he realized we had taken pictures the day we arrived, the suit was dropped. Had it not been for the pictures taken, this matter might not have been so easily resolved. You never know how important taking pictures can be. I suggest creating customer folders on your computer. Download your pictures, liner drawings, safety cover drawings, and any other documents that apply to each customer. It’s hard to see in the picture but here it is.
Take Payment Up Front: Take payments up front for pool openings, closings, pool & hot tub service calls, & weekly service. The payment gets your customer on the schedule. Taking the payment up front will get cash quickly flowing in to your business at just the right times. The pool opening season is just when your business will need a big influx of cash to get you moving. The pool closing season is a perfect time to store up dollars for the off season. Collecting in season payments a month in advance will keep you moving forward during the year. You will have a few customers complain about this policy. Trust me, they would have been problem payers anyway. Move on! This will eliminate a lot of hassles & time wasted on the phone trying to dig up dollars to keep your business alive. If you are using money from new jobs to pay for bills from previous jobs you are headed down the wrong path.
Keep a Credit Card on File: This will require having a credit card authorization form on file. Along with the form, I would also suggest adding a signature line in your pool opening/closing, service call, & weekly service contracts stating the customer approves you charging their credit card on file for any small repairs or parts required up to a certain amount.
Be careful though…. Your credit card company will charge you a higher rate for credit card charges typed in manually vs having the card in hand to swipe it. Merchant Fees are a huge expense for any business. If you have a retail store consider asking customers to use the debit card feature. Rates for debit pin pad charges are much lower than credit cards that offer rewards. You will need a pin pad machine in order to take debit cards.
Offer discounts for cash or check: You can also offer a discount for payment in full. If you offer swimming pool or hot tub weekly service, considering offering a 5% discount for payment in full. You will be surprised how many customers will take you up on the discount.
You might be able to charge what’s called a credit card convenience fee for anyone using a credit card to pay for large contracts. As a dealer, I would charge a 3% fee for any credit card transaction over $1000.00. I would couple that with a 5% discount if they paid the contract in full with cash or check. Talk about a cash flow generator. I loved getting $4 – $5000 dollar weekly service or liner replacement payments in March & April.
Look for Part 3 next week. If you want to dive deeper pick up, “Building a StoryBrand” by Donald Miller. Learn the real reason customers make purchases, how to simplify a brand message so people understand it, and how to create the most effective messaging for websites, brochures, and social media.
What are you reading to better yourself and your business? Please comment below. Maybe I missed something. Join the team on Facebook, Twitter and Instagram @thepoolblog.