The number of people who claim to be in business and display no business common sense at all, never ceases to amaze me.
As I write this article I have just finished a conversation with a person who sent me a scrap of paper with his name on it and an amount over $400 scribbled on the note. This person had carried out some work as discussed and this was his idea of an invoice. It didn’t look like an invoice, he had no ABN number and there was no description of the work carried out.
The work this person had done for us was fine and there was no argument about us wanting to pay him. The argument was that we needed proper paperwork for our taxation records. His answer to me was that he had done business like this before and I should find a way to make it work for me. In the end, I was able to resolve the issue by proposing a workable solution for us both, however this situation reminded me of many other instances where people who claimed to be in business display behaviours which make absolutely no business common sense.
Let’s take a look at some examples of what I mean.
Firstly, you need some basic business records.
Whenever you take an order from a customer (whether it be for a product or service) you need to have a standard way of recording the order and these orders should be filed for future reference. You should know who placed the order, when it was and precisely what was ordered. The method and time of payment should also be clarified at the time the order is taken. It would also be advisable to have your client complete a credit application if you are extending credit to your client.
If a production process is involved or if you are purchasing supplies or services from outside to fulfil the order, you should be keeping track of these and relating them back to the particular order. You should ensure that these are properly charged to the job and that they have been costed in correctly. You should also record the ABN numbers of all your suppliers so that you can claim your GST input credits.
Once the job is complete, (unless you have arranged progress payments) you need to raise a tax invoice quickly and get it to your customer for payment. The invoice should show your ABN number, your full details and a proper description of what is being invoiced. It should also state when you expect payment.
It does not matter whether your basic business records are kept on a computer or whether they are manual records. The main thing is that you keep proper records which you can refer to later and which demonstrate that you are actually in business.
A filing system is essential.
A proper filing system is essential so that you can retrieve your business records as required. You need a filing system to store your customer orders, purchasing records and supplier invoices, internal production records, your sales invoices and correspondence. If you keep your filing up to date and properly sorted you will make your business life easier and you will act more professionally. This is important for yourself, your customers, your staff and your accountant. You may also receive regular information which you may want to keep such as magazines, supplier updates, price lists and so on. Once again it makes good business common sense to have an efficient filing system for these items too.
You need some basic marketing tools.
In my opinion, anyone who does not have a business card and letterhead cannot really demonstrate that they are in business. The funniest thing is when I encounter people who claim to be marketing consultants who do not even have a business card, or a website designer who does not even have his or her own website. Why would you want to do business with someone like this? Why would you expect someone to do business with you if you cannot even give them something that represents you and has your contact details on it?
Even though you can prepare both a business card and letterhead on your home computer, I think it looks far more professional if they are properly printed.
What about your telephone, fax and email?
Here again you need to demonstrate some business common sense. Does your 4 year old child answer your business telephone or a grandparent that cannot hear properly? If so, you would be better off having a messaging service. How professional does your messaging service sound? Does it inspire confidence in you and your business?
Do people need to send you faxes? If so, what provisions have you made to receive these? It may not be necessary for you to have your own fax machine and a dedicated fax line if you use a service provider who can look after this need for you.
I come across so many people who are in business (or claim to be) and have an email address which uses a generic account such as hotmail. Now I’m not saying that there is anything wrong with having a hotmail account. Not by any means. However, it is so economical these days to register your own domain name that it looks rather unprofessional to simply use a generic provider’s name such as hotmail for your email address. After all, you are advertising their service, not your own.
Do you have a separate bank account for your business?
Many small business people try to run their business activities through their regular private bank account in order to save costs. While I’m all for minimising expenses, I think it is important to separate your business and investment activities from your private transactions. Not only will it give you a clearer overview of what is happening in your business, but it will make you look more professional and save you time in providing the necessary financial records in order to complete your reporting requirements.
Do you sound like a business person or a backyard operator?
Even if you have all of the abovementioned aspects in order, this one is essential too. The image that you project every time you talk to a customer, a supplier or your staff, will make a huge difference to the future success of your business. Think carefully about the words you use and the way you express yourself. Small improvements in this area can make a huge difference to your sales and profits.
The points I have mentioned above are just the fundamentals of business common sense. To some of you they may seem very basic and to be taken for granted. Basic they are, but certainly not to be taken for granted. The reason I have devoted an article to this topic is that I often see people who have not mastered these simple aspects of common business sense. They are sabotaging themselves and their business success by not taking care of these properly. They may be very good at their trade or profession, but if they ignore these business common sense issues, they will still fail in business.
About Hans Jakobi
Hans Jakobi is an educator, author and investor. He is the author of six best-selling books including, How To Be Rich & Happy On Your Income which is available at:
www.supersecrets.com and the presenter of the Super Secrets to Wealth® do-it-yourself real estate home study course. Join Hans Jakobi’s FREE Super Secrets® Online Newsletter
© 2002 Hans Jakobi. All rights reserved worldwide
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