From the April 1998 issue of Startups

If you started your own business after a stint in the corporate world, you may find that your former employers make prime prospective customers. Gerry Baker knows that firsthand: When he formed Corporate Consulting Inc., a crisis management public relations firm in Edmond, Oklahoma, one of his first clients was his most recent former employer.

"You have significant advantages [selling] to your former employer," Baker says. "You know the system, the company way." But that inside knowledge of the company will only help you get your foot in the door. "There may be a honeymoon for a while, but at some point, you're going to be expected to perform as good as or better than anybody else out there."

It's very important for you to recognize that your relationship with the company has changed, Baker says. As a supplier, you may be dealing with different people, some higher up on the corporate ladder, than you did before. He also notes that some of your former co-workers may see you as a threat to their job security, and their bosses may not be entirely comfortable if you have overt personal relationships with company employees. "This takes a great deal of sensitivity and diplomacy," says Baker, who stopped socializing with his former co-workers. "If they view you as a threat, they can be quite harmful to you."

If, on the other hand, your former co-workers see you as an ally, they can be extremely helpful. But don't take this as an indication that you can take it easy. Don't expect to be told company secrets or to be able to neglect the account and continue to retain it. "You go into the relationship with an edge, but that just gets you your first assignment," Baker says. "Your future depends on the quality of product or service you provide."

Fast Cash

A simple but often overlooked technique for improving cash flow is to coordinate your billing system with your customers' payable procedures. Submitting your invoices at the right time with complete information will often speed up payment, particularly with larger companies, says Vicki L. Helmick, who heads up her own homebased accounting firm in Casselberry, Florida. Her advice includes:

  • When setting up a new account, call to find out what the company's procedures are. Ask what you can do to ensure prompt payment.
  • Be sure your invoice is easy to read and includes all the necessary information. Clearly identify your products and services, your terms and where to send the payment. Also indicate any customer reference information, such as a purchase order number, that will help your client's accounts payable department determine the validity of your invoice.
  • If you're billing on a retainer, find out when checks for your type of service are written and time your invoices to arrive shortly before that date. Often, large companies have particular days of the month when checks are written for certain types of payables, Helmick says. If you miss their cycle, you may have to wait weeks or another month to get paid.
  • Be sure you're sending your invoice to the correct person and location. Some companies, for example, may require the purchaser to approve invoices; others may pay faster if your bill goes straight to accounting.
  • Bill on delivery of the product or service. "That's when the appreciation of your work is highest," Helmick says. "When they're thinking about you in a positive way, they're more likely to process your invoice faster."

Special Delivery

Being homebased offers many advantages, but one area that could present a drawback is shipping and receiving. Even the smallest operation will occasionally need to deal with a courier or freight company. And though you'll probably never be viewed as a major customer, there are things you can do to make the process more efficient and less disruptive.

Perry A.Trunick, chief editor of Shipping & Receiving magazine, says homebased businesses are faced with two primary challenges when it comes to dealing with freight companies: One is their lack of volume, which means they don't have much clout; the other is their residential location, which makes deliveries less predictable. Even so, freight companies--particularly overnight and package carriers such as UPS, Federal Express and even the U.S. Postal Service--are aware of the potential of the homebased market. Trunick advises collecting information from a number of freight companies so you can choose the most appropriate service at the best price for your outgoing documents and packages. Be sure to check out local and regional companies as well as the national carriers--you'll find them listed in the Yellow Pages under headings such as "courier services," "air cargo," "delivery services," "package express," "trucking" and "motor freight."

Also, don't buy more service than you need. For example, most overnight companies offer the choice of next-morning, next-day and second-day service. Morning delivery typically costs more, so only use it when you absolutely need it.

For incoming shipments, Trunick suggests letting your suppliers know your business is homebased and doesn't have a loading dock. That way, they can package materials appropriately and choose a carrier that's set up to make residential deliveries.

Another option is to take advantage of mail drop locations that handle shipping and receiving for you. Check out several in your area; although many are part of national chains, the services they offer may vary. It's also possible, Trunick says, that they'll agree to a small volume discount if you ask for it.


Corporate Consulting Inc., 1802 Canyon Park Cir., Edmond, OK 73013, (405) 359-6067

Vicki L. Helmick, 1312 Sterling Oaks Dr., Casselberry, FL 32707, (407) 695-3400

Shipping & Receiving, 1100 Superior Ave., Cleveland, OH 44114, (216) 696-7000

Jacquelyn Lynn is a freelance business writer in Winter Park, Florida.