One of the most common problems that affects businesses is that their customers owe them money. When you've done the work but people are being slow to pay you, you can get behind with bills and be short of money to invest in your business. This is, understandably, an annoying situation — you're being chased for debts that other people refuse to pay. There are, though, a few ways to improve your customers' payment speed.

Remember You're a Credit Provider.

When you do work and invoice afterwards you are extending credit to your customers. As such, if the cost is going to be high, you should consider running a credit check on them before you start work. This will show you whether the company you're about to do work for is in trouble, and can help avoid lots of problems later on. You can usually run credit checks onlin for next to nothing.

Give Invoices a Due Date.

A mistake many home businesses make is to send invoices that have a fancy layout and say how much the customer owes, but don't contain any direct instruction to pay now. This results in customers receiving the invoice and putting it on their 'unimportant chores' pile — you know, the one that doesn't get done for months.

To avoid this, a good strategy is to give your invoices a due date. Set it two or three weeks from when you sent the invoice, and make sure you highlight it. People will see your deadline and realise that you mean business — they'll think 'oh, I'd better deal with this' and you'll get your payment sooner rather than later. If you don't, a follow-up phone call saying 'I wonder if you realised that your invoice's due date was yesterday…' will usually do the trick. Almost no-one refuses to pay if you confront them directly — they just do it because they think they can get away with it.

In some places, the practice of putting due dates on your invoices might even entitle you to charge interest on money you are owed, or charge fees. Check your local laws.

You Could Try Debt Factoring.

Some businesses have success with a technique called 'debt factoring'. This is when you sell your invoices to a third party who specialise in administration and collection, and they give you the money for the invoice straightaway instead of you having to wait for the customer.

If you try this approach, though, you should consider the percentage of your invoices that the company is taking, and whether they're treating your customers the way you would want them to be treated. It might be best to only sell invoices to debt factoring companies when they haven't been paid by the due date, letting them act more like a collections agency.

Collections Agencies.

Of course, your last resort is to sell the debt to a collections agency. This will cost you around 10% of the debt. The collections agency will try to intimidate your customer into paying, ultimately taking them to court if necessary, and they might try seizing the customer's assets. Make sure you check out the agency you plan to use beforehand, though — you don't want them to be doing anything illegal.

You should always try to talk to the customer before you take this route, as if they're not paying the chances are that there's a reason. You might be about to force them out of business. On the other hand, they might just be forgetful, in which case they won't be too happy about you setting debt collectors on them.

Be Prepared to Settle.

Sooner or later, you might end up being owed money by a business that is in financial trouble — you're just one in a long list of creditors, as everything falls down around them. In this situation, you need to be prepared to settle with them for less than the original invoice price, or you risk getting nothing. It is a bad situation to be in, but it's better to give someone a break and get some money instead of pushing them further towards bankruptcy and getting nothing.

Deciding on how to price your crafts is an important factor when beginning your crafting business. The price of your crafts will increase or decrease the amount of customers who will buy your crafts. The price can be determined through several different factors, including your own calculations, as well as the environment in which you are selling them and how this relates to other craft businesses as well as customers. Here are five ways to help you determine the prices that you can offer when determining how to price your crafts.

1. Do the math. The first step to this is estimating the amount of time you spend making the craft, first by hour, then by week. Decide how much you would like to make per week from your labor. If you want to be specific, you can add in factors such as what you need to make a living comfortably. The next step is to add in the total cost of supplies that you use. Add this to how many products you are making per week. Divide the number of products produced in a week by the total cost for labor. This will determine how much you should sell each product for.

2. Research Your Craft. It is always good to find out what other similar products and craft businesses are charging for their products. Because they are hand-crafted, however, you should be able to go either a little above their price, or may decide to go a little under and offer your customers a discount. If you have a craft that you can not find anywhere else to compare to, then find an average of similar products to average out your costs with.

3. Find Inexpensive Craft Supplies. If you have determined your pricing and it is above what you would like to sell your crafts for, there are ways to cut costs for what you are making. One way to do so is by changing the supplies that you are using. Discount stores often offer the same brands and quality of supplies at a lower price. You may also want to look into places that are going out-of-business. They usually have large sales for you to stock up your supplies with. You can also use wholesalers or can browse through the internet for those wanting to sell craft supplies at a discounted rate.

4. Make sure you are listed as a business. By considering yourself a small business, you can apply for a tax ID that will cut taxes off of your supplies. You can apply for a tax ID through the government website. You can then either save your receipts for tax time or see if certain places will take the tax ID and automatically cut off the price.

5. Know your target market. It’s good to determine how much the customer will be willing to pay in relation to how much labor time and craft supply costs are going to cost you. If your target market is centered more on families or lower income families, it might be important to lower your prices and your craft supply costs. If you are selling certain items at a certain time of year, it is also important to determine the discounts and sales that you are willing to offer, such as during Christmas time.

It is always important to remember not to undermine your costs because you want it to sell. Remember that you are putting the labor and supplies into the craft. You should always at least make a little more than your money back. It is also important to not over price your crafts because they are hand made or because there are not as many available. This will turn customers away. Despite what you know about the product and the value that is in it, customers are usually looking for a good deal.

By doing the proper calculations and by knowing what resources are available to you, it is easy to determine the amount that you should be selling your crafts for. By using the right math and knowing what to look for, you can find the right pricing for your crafts and let customers believe that they are finding a good deal for what they are getting.

A very important factor in any business is how you manage risk – yet it is a factor that is often ignored by home businesses.

You have to realise that any time you start a business, you are taking the risk that the business might fail. What experienced people do is shield themselves from risk at every opportunity, to make sure that they can keep a business going for months on the brink of disaster, and wind it down gracefully if it really has to go under.

You need to have a plan for what you’re going to do if your business looks like it’s going bankrupt. Are you going to borrow more money, if you can? Sell your car? Raise prices? Get rid of staff? Done right, you should have a good package of ‘rescue measures’ that really do have a chance of rescuing the business.

Borrowing.

If you need to borrow more to keep your business afloat, take great pains to avoid looking desperate. Act like your business is moderately successful but needs more investment, and you’re far more likely to succeed in getting more funding.

Bye-Bye Staff.

This is a bad idea, but not always a terrible one. In a home business, you presumably only take on staff because you have enough business to cover it, don’t you? So it makes perfect sense to get rid of the staff when things start to go wrong and go back to doing it all yourself.

Price Hike.

When your business is in trouble, there are few things guaranteed to destroy it faster than a price rise. Just don’t do it, however tempting it might be – cut costs instead. If you absolutely must raise prices, do it by scaling back what you get for your money in each of your price ranges, without actually raising the prices.

I know of a struggling bus company that kept its fares the same for years but gradually started to run fewer buses and send them all over town, making journeys take longer. People reacted a little badly to the longer journeys, but it was nowhere near the scandal that there would have been if prices had risen.

Keep Staff Pay Aside.

Whatever you do, make sure to keep staff pay separate from the other business finances, and pay it out immediately if the business looks to be heading for trouble with its creditors. It is far better to be paying your staff on the last day than to be giving all that money to the creditors. Leaving staff unpaid will destroy your reputation, not to mention hurting a lot of innocent people.

The ‘Closing Down’ Sale.

If you plan it well, your last day in business might not be so bad. Just make sure everyone knows that you’re closing down for real, but still price everything ever-so-slightly above cost. In this way, you can avoid the drastic loss-making ‘Everything Must Go!’ mentality, and come out of your business the same way as you would if you’d decided to shut it down that day for some other reason.

Selling Your Business On.

If you’re shrewd about it, you might be able to keep your business going long enough to sell it to someone who could turn it around. There’s nothing dishonest about this route – it’s the one most big companies take if things start to go wrong. You might even find that one of your competitors is willing to buy, even if only for your established customer base.

It’s Up to You.

Disaster plans are very personal, and they depend a lot on how much risk you’re willing to put on yourself. If you do things the sensible way, then you’ll go as far as you can to avoid selling or borrowing against any of your own assets just to keep a business afloat. On the other hand, if you’re really determined and a bit of a risk-taker, putting some things of your own at stake might buy you enough time to recover from whatever hit your business.

It’s a little like playing poker: are you going to be the guy who walks away and leaves his money on the table, or are you going to throw your car or house keys onto the table and raise the stakes? That’s risk management for you.

Do you enjoy making candles, and always seem to receive positive comments from friends and family? If you think you have a flair for making eye-catching candles, you may want to consider a candle business. But before you begin to market your candles, make sure you follow these five tips for profitable candle making.

1) Calculate your costs.

Before you begin to think of pricing, calculate the exact cost of each candle you make. This can be tricky since you probably plan to buy your supplies in bulk. To calculate the cost per candle, work out the cost per ounce of each of your ingredients. For instance, you’ll want to know how much you are paying for paraffin wax, acid, color, scent, and any other ingredients you may use to make your candles. Measure how many ounces of each ingredient you use in each candle, and then multiply that number by the cost per ounce. This should give you a good idea of how much it costs you to make one basic candle. If your candles are accompanied by any type of accessory, such as ribbons, bows, natural accents, or containers, don’t forget to add the cost of these to the total cost of each candle. You should also add the approximate cost of the wick. As a general rule, you should price your candles 3 or 4 times the price of production. If you plan to sell your candles wholesale, pricing should be set at roughly 2 times the cost of production.

2) Buy your supplies in bulk.

It’s always a good idea to purchase your basic supplies, like wax and jars, in bulk. Contact your supplier and see if they are willing to provide any further discounts. Most shipping companies also provide a sizeable discount if you order more than 200 pounds in supplies. Also, if you use a wide variety of candle fragrances, consider limiting the number of fragrances you use until you become better established. Producing such a variety of candles can make it difficult to turn a profit.

3) Approach local shops with your candles.

One of best ways to become profitable through candle making is to get your line of candles carried at local shops. Approach a local store that carries a good selection of candles and ask to make an appointment with the store manager. Be professional and courteous—some people aren’t as open to sales pitches as others, so make certain you don’t come on too strong. If you aren’t able to secure an appointment with the store manager, or if the store personnel seem busy or unapproachable, be very polite and offer to return at another time. It’s a good idea to leave materials that they can review at their leisure. Be prepared with brochures, samples, and business cards. Follow up at another date to see if they’ve had a chance to review your products.

If you find a store that seems open to your products, offer to provide them with a few candle samples that they can leave burning on the front counter. This provides you with good exposure and free market testing. Also, if customers express interest in your sample, there’s a good chance that the store will consider carrying your candles.

4) Specialize in a popular ‘theme.’

If country-themed candles are popular where you live, by all means, specialize in creating your own special brand of country-themed candles. Natural candles that incorporate the use of leaves, twigs, dried flowers and fruit, are also very popular. And, of course, you will want to consider seasonal and holiday-themed candles. Find out what sells best in your area and base your candle creations on this information.

5) Never underestimate the power of smell.

Make sure your potential customers can smell your candles! Many people work hard on creating beautiful, long-lasting candles, but package their candles in a way that makes them impossible to smell before purchase. Most people, whether they realize they’re doing it or now, sniff candles before buying them. If your candles have distinct fragrances, make certain the packaging allows customers to enjoy them. Otherwise, all your hard work to create sweet and memorable fragrances may not be readily evident to potential customers.

Mail order is a popular way to send several different types of items to a customer. Because of this, it is a potential way for you to market and sell your crafts. In order to do so, you should know some basics of what you will need in order to get mail order to work properly. This advice can be used in both internet mail order materials or in sending out catalogs to certain customers who are interested in buying.

When organizing mail order for your crafts in your home, there are several different things that you need to set up. One of the first organizational tools that will help you is a data system that will help with inventory and accounting. This way, you can keep track of the mail that you send out, and what comes back in and with how many orders. This will help not only in inventory, but also in keeping track to see if mail order is efficient for selling your crafts. You will also need to set up a way to take credit cards and checks over the mail and through the internet. It is best not to send your crafts out until the money that is being sent to you is cleared. Order entry and processing is another one of the tools to organize before you start mail order so that you can remain organized in your hand made crafts.

Consider who you are going to distribute to when setting up your mail order business. One way to do this is to begin a network of contacts. If people who have bought your crafts would like to be set on a mailing list, then you can send them things through the mail by their request. Another way to do this is by having potential buyers sign up on a website that you may to request a catalog to mail order. It is also possible to set up a website and have customers order through filling out all of their information online.

If you decide to make a mail order catalog, or if you are using mail order on a website, it should contain several different elements. First, it should catch the customer’s eye. This means detailed descriptions as well as pictures of your crafts that look professional. Next, is to be specific as well as brief about what you are offering. Letting the customer know what materials you are using, the size of the craft, etc. will help to let them know what they will be receiving. You should also include a brief description of who you are and how long you have been making crafts. Many times, reviews on your craft products can be included as well. This will help in making you look professional, and will give customers a way of respecting and trusting you and your product.

Another aspect of mail-order is including your information. A fax, e-mail or address of where to send their order for the crafts should be supplied. You should decide about whether you will have a minimum order requirement, or not. You should also decide what the shipping order costs will be, and how they will be shipped. One way to do this is to measure how large the packages will be and do an estimated weight cost. Then, you can look into places such as UPS, FedEx, or regular mail for some options. It is always best to let the customer know which way they will be receiving their order by.

You should also supply an order form in the catalog when you send it out or on the website. This, as well as a different list of all of the crafts that you offer with the prices on another side can help a customer decide what they need through mail order. If needed, there are often times software that can provide a guideline for creating a unique look and help put in the information that is needed for the development of your catalog.

Whether you are setting up mail order on the internet, or sending out catalogs directly to past and potential customers, it is best to have a layout of how the mail ordering will work and be beneficial to you, as well as ways to provide customers with the best service and options possible.