Applegate: During tough times, go after money owed

Jane Applegate, an author of four books about entrepreneurial success, last week told an audience that included small-business owners that the recent meltdown on Wall Street reminds her of an earlier financial crisis, when she was working as a business writer for The Los Angeles Times about 20 years ago.
It was the time of the savings and loan crisis, when credit was tightened to alarming levels, Wall Street was wobbly, and financial institutions once believed to be immutable were facing closure.
“I learned then what happens when greed takes over,” she told an audience of about 60 people during a free educational forum Oct. 1 at the Johnson & Wales University Westminster Technology Center in downtown Providence. The forum was sponsored by Cox Business and Bloomberg Financial in conjunction with the R.I. Small Business Development Center.
The comparison Applegate drew between the S&L crisis and today’s economic chaos led to a clear message. “We need to believe and to remember that America’s is the strongest economy in the world and we will get through this,” she said. “No matter what your business and this economy throw at you, American entrepreneurs are the most resilient.”
Perhaps best known for her book “201 Great Ideas for Your Small Business,” revised and updated in 2002, the Vermont resident made her first visit to Providence to share with local small-business owners what she called “practical strategies” to help entrepreneurs, not only survive tough economic times, but actually flourish and “take advantage of what’s going on in the economy.”
“The most important factor about managing your business in a recession is that you must be very conscious of what you are doing,” she said, suggesting that now is not the time to operate on autopilot or let urgent matters slip. She offered tips on such issues as saving energy costs, getting rid of “toxic” employees, collecting overdue accounts receivable and raising the profile of a business without spending a lot of money.
“When you leave today, go back into your business as a stranger, go into your office with new eyes,” she said, suggesting that a new perspective is the best way to begin “an energy audit” of the workplace. Saving energy “could be as simple as turning off all the computers” when the office empties every day, she said, a practice that could “reduce your energy bill by 5 percent, maybe 10 percent.”
To offset the inevitable grumbling after the thermostat is lowered for winter, she suggested a business distribute to workers warm sweatshirts branded with the company logo and actively include employees in the energy audit, “even asking people to look at their own work space” with an eye toward cutting costs.
A simple way to boost a company’s profile is to hold a holiday open house for customers and employees, Applegate said, a move that can raise morale and get the office cleaned up. One woman in the audience, who said she owns a business with a small staff, told the gathering that she holds an annual party with a carnival theme and her employees look forward to it every year.
Unless a business is a bank, Applegate urged local entrepreneurs to go after the money that clients owe them by, for instance, offering a modest discount in exchange for timely payment or, to take a tougher approach, send bills stamped “past due” in large red letters. “It does work,” she said. Contacting overdue customers to discuss payment arrangements keeps the lines of communication open, she said. But, Applegate added, “I totally recommend cutting people off” if payment is not forthcoming. “You cannot keep up a relationship with a bad customer.”
Employees who always seem disgruntled and depressed are a “huge drag” on a business, Applegate said, “especially in soft economic times.” Depending on how severe the situation is, Applegate recommended meeting with the affected employee to see if his or her job could be changed or carefully documenting missteps with an eye toward termination. “It’s better to document than stock up on Advil and Maalox,” she said, also suggesting that a lawyer be contacted “because you don’t want to be sued.”
Ed Lemoine, owner of Telecommunications Concepts Inc. in North Smithfield, after the forum said he found Applegate’s advice to include “very good, creative ideas,” such as using social networking pages like Myspace.com to promote a business and the importance of cross-training employees to ease the short-handed holidays.
Lemoine endorsed Applegate’s rant against e-mail. She spoke of managers who she said waste hours plodding through hundreds of e-mails each day, advocating instead the use of priority mail and fax machines. “It’s a lot more personal” to send letters to clients, Lemoine said.
“Her ideas are very good,” said Joseph L. Orlando, principal of the YKSM accounting and consulting firm in Providence and Westerly. Orlando especially liked the advice Applegate offered about collecting on overdue accounts. “That’s the first thing that slows down,” he said. “It’s important to keep on top of that.” While his company does send out monthly statements seeking payment on overdue accounts, the next batch will be “a little more emphatic without hurting the relationships,” he said, perhaps even with “past due” stamped in big, red letters. &#8226