H: iii) Payment for your goods and services.

All commercial businesses need payment in return for their services or products. You need to know how you will get paid for them as there are cost implications for different methods!

If you are being paid in cash, you will need to have adequate security for both internal and external sources, your money and your staff, in order to minimise potential theft.

How do you know that bank notes are genuine? Where will the notes be kept?, Will you require secure storage, until the notes can be transferred to a safe?. What about under counter or under floor security systems?.

Is your proposed till large enough to keep your notes separated by denomination? Is it big enough to cope with all the credit/debit card slips etc. Will a basic till suffice, or Will a more advanced one be needed?  The more advanced the till, the higher the cost, the more staff training you will need, and the more information that will be available to you for analysis. (What items are selling well? What should change?)

Will you require different departments for different goods or be able to individually programme each product into the till?.  Will you be using Point of Sale scanners (as in many larger shops), which can adjust your stock levels automatically, or will you have the use of pre programmed buttons?.  Do you need your till to accept Euro payments, and debit/credit card transactions?

Credit Customers.

Are you going to be offering credit terms?  Can you afford not to? Accepting payment by credit is not always ideal for a new business. You may have to wait for your payment, but what if you are not paid on time?  How do you know your credit Customers are sound, and likely to pay?

You can have potential customers checked out through Credit Reference and Protection agencies, who can supply you with the information you need.

Factoring

You can also use a factoring company. This is a method where you are paid for a high proportion of the value of the items sold to credit customers and the factoring organisation, has the responsibility for collecting the payment from the customer. (It is their responsibility to check the credit worthiness of the customers).

After they have been paid, they pay you less the fee for the transaction. This can be expensive but at a cost, you have an assured cashflow from your sales. It also means that bad debts are the responsibility of the factoring organisation. This can be especially useful to credit businesses, with a high customer spend per business.