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Characteristics Of A Good Business

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The Credit Management Research Centre at Leeds University Business School has found that the average SME writes-off ?14,000 in bad debt each year. A third of all UK companies cite this bad debt as a direct reason for business failure. But why are there so many twists and turns in the roads to running a liquid business and what can be done to ensure a smoother ride?



One explanation for poor business credit control could be our traditional British reserve.

Of the thousand small businesses we've met in the last two years, over three quarters of them are facing an impending cashflow crisis. In the main, the crisis is due to the traditional British reserve and the fear of asking for money they're owed," says Andrew Radley, director of outsourced credit control company, Inksmoor Financial Services.

This is true, the British find it difficult to be direct, says Dr Brian Young, lecturer at Exeter University's School of Economic Psychology, money is a taboo subject, we tend to avoid talking about it as it might reveal too much about another great British obsession - class.

This English reserve is a throw-back to 18th century manners yet it's restricting 21st century cashflow, says Radley who has 20 years' experience of credit control. "There are various techniques that can be used to persuade customers to pay promptly."

He explains that "great cashflow is the life-blood of any business. This means tight credit control and that involves building relationships and persevering with clients to make them adhere to payment terms.

Firstly, I advise SMEs who are chasing for late payments to verify that the goods, services and invoices have been received and agreed. Once this has been established, its time to act proactively and professionally, attitudes must change from "would you mind" to "I'm calling to get what we're owed."

"The trick is to prepare and to act before the debt is over-due," says Radley.

"First off, ensure your contracts are in place - terms and conditions including payment.

"On each invoice, ensure you state clearly your payment terms.

"Its imperative to form strong relationships with your customer purchase ledger clerks. Start by discovering their name so you will always have a point of reference when you call. Open your conversation with a few light-hearted comments or questions to build trust and rapport. Then it's down to business.
Characteristics Of A Good Business
The essentials which go to make up a good business letter may be divided into two classes - mechanical make-up, and contents. Before a letter can come into existence the mechanical side must be attended to. The subject matter may be pertinent and well composed and yet the letter itself be so arranged typo-graphically and so disposed on the page that the unity of the whole is lost.

The display as a whole should balance. Before the stenographer starts the address, calculation should be made as to how many lines the letter will run and as to how it should be disposed on the page. The body of the letter should neither be crowded near the top nor bottom of the sheet, but should be so placed that, viewed in connection with the letter head, it presents a well balanced and artistic effect.

This effect is often underrated, being in fact passed by without a thought by the average stenographer, and the ordinary business man is so busy seeing that his dictation is correctly transcribed that he gives little thought to this essential. Harmony of color effect should be observed. A yellow paper bearing the firm announcement in blue, the letter in green and signed with purple ink is not to be recommended.

Letters blurred in copying and wet from the press or otherwise violating the rule of neatness cannot help but produce an unfavorable impression. Orthography and capitalization, particularly of proper names, should be exact and uniform.

A misspelled word in the body of a letter, particularly if a mere transposition of letters in typewriting, may occasionally slip in and do no particular damage, but the misspelling of the name of the party addressed may lose an order, and cannot help but militate against the general effect of the letter. Neatness uncompromising neatness - that should be the first effect of a letter, giving the idea that the firm putting out the writing is thorough master of the minor (as well as the major) details of its business.

Contents

In letter-writing, contents may be divided into subject matter and expression. The subject matter is, broadly speaking, what the writer says. This should coincide with two other things:

(1) what the writer wants to say, and

(2) what the one addressed wants to know.

Something which is the a b c of life and a mere matter of routine to the writer in a certain line may be abstruse and complicated to a non-technical reader. To avoid an offensive simplicity of language on the one hand and excessive technicality on the other is one of the tests of a good business correspondent. There is a tendency to slight simple questions asked by different inquirers day after day, which must be avoided by putting oneself in the place of the one asking the question, and giving the knowledge for which he is looking.

One of the most, if not the most, important essentials of a good business letter lies in correct expression. The one thing which causes more failures in business correspondence than any other, is the incorporation of personal peculiarities in a letter. There may be called to mind, in fact, more than one established business backed by ample capital, having a broad field and financed by capable and conservative business men, that is at the mercy of a poor correspondent. This is ably expressed by Forrest Crissy, who says:

"So apparent must be the importance of this branch (tact and tone in business letters) of business systematization, that scarcely a word of argument is needed to enforce its necessity. Very recently a large whole-sale merchant said to me:

'I have recently been obliged to discharge the head of my credit department - my confidential man. He is honest, conservative and shrewd, but recently I have been awakened to the fact that his incapacity to write a letter which does not leave a sting, a chill, or at least a sense of lofty indifference, is hurting my business more than would some downright reckless blunders. When he writes a letter granting a good customer a larger line of credit he gives it a twist that somehow makes that customer wish he hadn't asked for credit and thus placed himself under added obligations. And if he refuses to meet the request for such a favor the refusal is so put that it seems a studied effort to conceal a strong unwillingness to give any credit at all.

Yet this man has always considered him-self an adept in letter-writing - and for a time he completely hypnotized me into that view. But at last the steady withdrawal of patronage and the occasional out-spoken retorts which his letters provoked forced upon me a recognition of the real condition of affairs. Then I went out after a man who could write a business letter that had just the right ring to it; that was neither so sloppy that it sounded hypocritical or so stiff and stilted that there was no tone of good hearty business friendliness in it.

I have found him. He comes high, but the difference in results is remarkable. Of course, there are other things required than this form of literary ability - that's what you'd call it. He must have business experience, business judgment and all the other cardinal business virtues; but the addition of this peculiar capacity to write business letters that hit the mark is a rare gift and makes him a star man.' "

Simplicity and clearness as an element of expression cannot be rated too highly. The saying of a thing in the plain language of the common people, not only adds to the style and dignity of a letter, but has the most vital element of being understandable. As Chas. R. Weirs says, "Eloquence, either real or imaginary, has no place in a business letter."

Whatever else may be neglected in writing, courtesy should not be slighted. A man may be told nearly anything face to face - it is qualified by the bearing, tone of voice, manner and earnestness of the speaker. A sentence may be given an entirely different meaning by a tone or gesture - it may even be diplomatically changed after partly spoken, to make it conform to the unconscious demand of the listener, and most of all spoken speech is transient. What is written, on the other hand, is put down in black and white to stay. The record is permanent. It can be offered in evidence, can be dug up years afterwards from a musty file, and discourteously written can queer, not only an immediate sale, but the sales of a decade.

Length

Letters often tend to verbosity from the fact that they are dictated instead of written. Were a man to write his letters himself with pen and ink he would study brevity and conciseness of expression, but having letters written for him, he will dictate more than he would write. Brevity is not always desirable. Some people - particularly those receiving few letters - like to receive lengthy correspondence. Getting few letters, they wish those long and newsy.

A letter is an event to some patrons and cannot be too long for a careful perusal. In this class of letters the party ad-dressed may be often appealed to in conversational style; as, "Judge of the goods yourself, Mr. Brown," "We ask you, Mr. Smith, if we have not treated you fairly?" etc. At the other extreme is the business man, particularly the city business man. To him, brevity to the point of curtness is always welcome. As someone has alliteratively said, the formula for a business letter to a busy man is: Sir: Say it. Stop!

Judging the Other Man's Letter.

One of the pre-requisites of a good correspondent is the ability, inherent or acquired to judge the general character and status of the writer by means of his letters. Until the last few years the letter-head of a firm was a considerable guide to the standing of the company putting It out, but good printing is now much more common and many one-horse concerns put out conservative, well-gotten-up stationery.

Ability to recognize the efforts of an amateur or schoolboy inquiring for a catalog with no intention of buying and to treat the writer accordingly, call for almost occult powers. The president of one of the large machinery companies putting out a cement mixer selling at $850.00, relates that one of the company travelers visited Detroit in response to an apparently good lead and found a twelve-year-old boy wanted a dozen cement mixers "to go into the mail-order business with."

Some companies putting out expensive catalogs write a letter asking a doubtful inquirer to fill out an information blank before sending a catalog. The correct interpretation of the personality of a writer means the saving of dollars of expenditure as well as the ability to write him correctly. In a fire insurance concern employing hundreds of agents it would be easy for a manager to inform himself through his special agents as to each agent's nationality, education, experience in the business, etc., and vary his correspondence accordingly, while a mail order house might have no means of judging a man but by his bare letter.

Form Letters

A form letter is one of a series of letters, to be sent on similar occasions. Such letters are usually in imitation typewriting with blanks left for the name of the party addressed, and when carefully executed are a close imitation of a typewritten letter. Form letters vary from those not to be distinguished from actual typewriting, to the stock letters of collection agencies, in which no attempt is made to imitate the machine. Some writers use a number of short forms or inserts which they use in dictating to avoid a repetition of dictation.

Letters of Recommendation

The promiscuous writing of letters of recommendation has done much to cheapen the effect of recommends. Many firms refuse such letters entirely. Perhaps the best plan is to have an employee, when leaving, use his former employer's name as a reference.
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