Re: Problem Getting Advertisers To Pay
CHAD LEVIN WROTE:
>I have been running my web-site for five months now, and
>bring in a substansial amount of traffic. I do have a
>problem with my sponsors. They don't pay for their bills. At
>the time the banner goes up I send them a invoice with a
>due-date of NET 14 days, and at times I don't recieve
>payments until a month later. Ca someone please give me
>advice on how I can get the people to pay on time.
>
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My advice to Chad would be that he is doing very well to get
payment within a month. Especially from ad agencies and
other large companies. It is not that companies want to
penalise small players by paying late but accounts
departments have many invoices crossing their desk and it
takes time to handle all that paper. They probably assume 30
days payment terms anyway, and pay within 6 weeks! I should
base your business plan around an average collection time of
6 weeks and look on any earlier collection (and your 14 days
terms will help here) as a bonus. But don't expect to be
paid (and certainly don't depend on being paid) in 14 days.
Also make sure you build in a bad debt allowance (perhaps
10%) into your business plan. Remember: **most small
business (even profitable ones) fail because of cash flow
problems** so plan for the worst and hope for the best!
Good luck!
Jeremy Swinfen Green
Group Digital Media Director
Carat International
2-6 Fulham Broadway, London SW6 1AA
+44 171 550 3206
http://www.carat.com
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Received on Fri Apr 02 1999 - 08:56:14 CST
