Even in a recession, savvy retailers can boost their business.

The Flower Lady, Suwanee, Ga.
How does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week — flowers are perishable!

By Coeli Carr, CNNMoney.com contributing writer
As budgets get tight, people are spending less on luxury items — which means retailers in that market also need to clamp down and mind the bottom line.

Flowers’ short shelf life mandates that you control buying and adhere to a strict formula, says Keith Riewe, owner of Bice’s Florist in Fort Worth, Texas. The industry standard rule is that the wholesale cost of your flowers should be one-third of what you sell them for, he says.

The moment you realize you’ve got product left over, it’s time to cut your orders, says Riewe. Although many florists pay less for flowers by using a standing order, it’s often more cost effective to customize your orders. You’ll pay a little more, but you won’t be throwing unsold flowers away. It’s better to run out than to have unsold product, he says. Some florists have hybrid ordering systems that consist of a smaller standing order, and a separate, supplemental order when necessary.

Another way to cut your expenses is to keep a detailed count of what goes into your bouquets.
“Designers love to overstuff an arrangement to make it look pretty,” says Riewe. “When that happens, you’re giving the customer way more than what they pay for.”

Louie Theofanis, owner of Major Wholesale Florist in New York’s flower district, suggests boosting your margins by filling out bouquets with less expensive but attractive blooms. “Presentation is always important,” he says. “It’s important that customers feel they’re going out of the store with an armful of flowers, and that they’re getting their money’s worth.” Greens have a longer shelf life, he adds.

But no matter how gorgeous your merchandise is, you need to get customers into your store. That’s why advertising and promotions are even more important in a sluggish economy. Riewe recently gave away 500 rose bouquets, featuring a dozen flowers in each. The only thing people had to do to get one was come to his shop and provide contact info. Along with the bouquets, recipients got a card prompting them to visit the shop's Web site. Remarkably, 298 out of the 500 people did so.

That's another way to boost business. “It’s imperative you become technically savvy,” says Riewe, adding that most flower shops, compared to other retailers, are lagging by five or six years. He suggests using point-of-sale software to collect information from those who send and receive your flowers. Using the data he collects, Riewe sends out "preferred customer" cards, which offer an opportunity to earn reward points and be notified by e-mail of special offers.

Riewe suggests that florists rely less on corporate clients and focus on consumers. If one big company’s account represents a large part of your business, your revenues will become too dependent on them. Expanding into weddings and events is a smart move because those orders are typically paid for up front.

Give us your advice: Check out recent “Ask & Answer” questions.

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A dry cleaner considers turning customers' absentmindedness into a tidy tax break.

Taylor, Jackson, Miss.

I own a dry cleaning business and was wondering what to do with all the forgotten or left-behind clothes. They date back a few months or as far back as a year. I read that by donating them I could get a tax write-off.

By Kathleen Ryan O'Connor, CNNMoney.com contributing writer

You can donate them, but you might want to review your state's abandoned property laws — and at least one expert we spoke to says you can't take a tax write off.

Here's why: "A business charitable tax deduction has to have a tax basis," says Philip R. Lieb, an accountant in White Plains, N.Y. "The clothes cost the dry cleaner nothing. The cost of cleaning has already been expensed through the dry cleaner's business operation. The business charitable deduction would be nothing."

And, depending on the state, you also can't just dump them off at the local Goodwill and call it a day.

Many states place the disposal of forgotten clothes under abandoned property laws, and the guidelines can be quite specific, says Ann Hargrove, director of special events with the industry trade group the National Cleaners Association.

One New York cleaner ran into legal trouble for trying to sell clothes that had been left for more than six months, Hargrove recalls. In New York, the property cannot be sold, only donated to a charity.

And to give you an idea of the specificity of the law, at least in New York: Cleaners must give notice to customers that abandoned dry cleaning will be donated after six months, and "such notice shall be at a minimum 11 inches in height by 17 inches in length and the printed characters shall be 1.25 inches in height and at least .5 inches in width," the law decrees.

The cleaner must also keep the donation receipt, with the original receipt for the customer's drop-off, for a full three years after the donation.

Mississippi law is a lot less clear.

Kathryn Stewart, a Mississippi Treasury Department spokeswoman, says she can't find anything that places clothes left at a dry cleaner under the state's unclaimed property laws, which cover cash and securities.

Your fellow cleaners in Jackson seem to work under an informal guideline of considering items abandoned anywhere from 30 days to a full year after they're dropped off, says Ebony Beals, a clerk at Clark Cleaners, which has several locations in Jackson.

They wait a year and then donate the items. "We figure you either forgot or didn't want the items, but we do wait a full year," Beals says of her store's approach.

For additional advice on the tax implications of abandoned items, consider consulting your personal accountant.

Give us your advice: Check out recent “Ask & Answer” questions.

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Handling the client that wants the goods but doesn't want to cough up a check.

Susan Lewis, Lancaster, Calif.

Can we legally hold a client's paperwork if they haven't paid their bill? We do their bookkeeping and they haven't paid in months. We haven't done any additional work for about two months, and now they are asking for their paperwork back. If we send it to them, we will never get paid.

By Kathleen Ryan O'Connor, CNNMoney.com contributing writer

Sending the paperwork back likely won't make a check materialize, but there are ethical issues to consider with holding it hostage.

Let's start first with trying to get paid.

Sharon Means, a certified public accountant from Cleveland who also owns a bookkeeping business, just dealt with a similar situation.

“I didn’t send it back," she says. "I just kept killing them with kindness. Every week I would send an e-mail. 'Can you pay me some? A payment plan?' If you are going to have any work done in the future, they have to understand that you just can't keep dishing it out with nothing in return. It's the squeaky wheel that gets the oil, so you have to put yourself in front of this person."

Her tactic paid off. "We worked it out so he paid at least half, and then we set a schedule for paying the rest of it," she says.

The recession is making it hard for many people and businesses to stay on top of their bills, she acknowledges "That’s the thing. Everyone is cash-strapped, I understand, but you have to keep up communication.”

But do you have a legal or ethical obligation to return the client's work product, cash or no cash? Being a bookkeeper means you have little regulatory framework for your job — unlike CPAs, who are bound by the American Institute of Certified Public Accountants Professional Standards. Violating those standards can lead to membership termination and disciplinary sanctions against certified accountants.

The relevant section of the Institute's standards code says, in part, that any financial records the client has provided you with should be returned on demand. Records that you've prepared yourself should also be handed over on request unless there are fees due to you for the preparation of those records. Supporting records related to finished work can also be withheld if you're owed fees for that specific work product.

David Bybee is president and CEO of the National Association of Certified Public Bookkeepers, a trade group for the unregulated bookkeeping field. He recommends that you give back any work papers that the client provided to you, such as year-end financial statements. But final reports that you produced do not have to be returned without compensation.

Give us your advice: Check out recent “Ask & Answer” questions.

When to get tough with a deadbeat client

Help, my client won’t pay!

How to avoid deadbeat clients

How to stand out in a crowded field without spending loads of money on advertising.

Jenny, Deer Park, N.Y.
I own a small beauty shop in a mid-sized town on Long Island, New York. The problem for me is the competition: In the past five years, three more beauty shops opened around the five-mile area, and my business started to sink two years ago. How do I stand out from a crowded field without spending tons of money on advertising?

By Lenora Chu, CNNMoney.com contributor
Start off by giving some serious thought to what really differentiates you from the competition.

Develop an “elevator speech,” says Willis Turner of the Richmond, Va.-based marketing consulting firm Huntsinger & Jeffer. That’s a 30-second answer to the question, “Why should I come to your shop instead of your competitors?”

Do you have highly trained stylists with more experience? Do you specialize in certain types of service? Are you better on service details like remembering names and birthdays?

Once you’ve identified a few key points, Turner says, focus on them again and again with your customers.

“Repetition is the key to success,” Turner says. “Remember, just when you start to get tired of your message, that’s when your customers and prospects are really beginning to notice it.”

The goal is to jumpstart a word-of-mouth campaign. No form of advertising is more effective, so make sure every client leaves your shop with a reason to tell her friends how great you are, Turner says.

Then give your customers an incentive to keep coming back — and to refer their friends.

For example, you could offer a referral program and print special discount cards for clients to give to acquaintances. Both the new customer and the referring client would be eligible for the discount.
You could also borrow tried-and-true methods of inspiring customer loyalty from other service industries, suggests Steve Winston, a South Florida marketing and communications consultant.

Start a frequent-visitor rewards system, much like the airlines’ frequent flyer programs, suggests Winston. Customers can earn a set number of points for each treatment, then win free services when they reach a certain threshold.

Like restaurants, you could post daily or weekly specials on a blackboard in the window to draw in traffic.

Or you could distribute discount coupons in your local area, like many home furnishings stores or take-out restaurants do. Try hand-delivering coupons to a targeted group of people, Winston says, such as teachers at a nearby school.

Lastly, make sure you have a brochure that lists your services and your strong points relative to your competitors.

It may cost a little money to produce, Winston says, but if done right, it will stand as a record of what makes you different in a crowded field.

Give us your advice: Check out recent “Ask & Answer” questions.

‘I started a biz – and now it’s failing’

When 'free' doesn't pay off

Finding the best customers for your business

Some clients aren't worth the headaches. Advance vetting and precautions can spare you the pain.

Chris Walker, Phoenix

I started a concierge service on a tight budget. I am not looking to conquer the world in a day. I would like to attract the "right" customer and grow the business within my means. What would be the best methods to find that "right" customer?

By Kathleen Ryan O'Connor, CNNMoney.com contributor

For an entrepreneur just starting out, it's tempting to taken on any client willing to promise cold, hard cash in exchange for your services. But the seasoned small business owners we spoke with all say the same thing: Do all the due diligence you feel is necessary for your particular business – credit checks, background checks, reference requests – but never forget the most important check of all, your instincts.

"Twice during the past year, I've signed clients about whom I felt uneasy," says Steve Winston, who runs a marketing and communications firm in South Florida. "And both times, I should have listened to my gut feeling."

One client was unable to communicate what he wanted from a marketing campaign and frequently left Winston waiting for an hour or more at appointments. "Yet, because of fears of about the economy, I took them on," Winston says. In the end, they parted ways.

The client never paid for the initial work completed. "I wrote it off as bad debt and lessons learned," Winston says.

If you want to formally vet potential clients, you have a few options. A Google search is an easy first step for finding out more about an individual or a business. If your potential client is a company, you can go to the Better Business Bureau's Web site and check to see if complaints have been filed against the company, and if so, how they've been resolved. A Dun & Bradstreet background check is commonly deployed for vetting. The most extensive report will give you a complete snapshot of the business: who owns it, how long they've been in operation, how often they pay late, details on any court judgments or liens, and even a recommendation about how much credit to extend.

You can also ask for references and check them by calling others with whom your potential client does business. What's been their experience? Did they get paid on time?

Consider joining a trade group to swap ideas and advice with fellow concierges working outside your geographic area – i.e., those who aren't direct competitors. The National Concierge Association is a good starting point for your industry.

And because the best defense is a good offense, it's critical to have a contract that spells out all the details. Unless you've comfortable drafting one yourself, it's worth paying an attorney to help you create a basic template contract you can use on all of your future engagements.

One excellent and often overlooked way to guard against deadbeat clients is to require that at least a portion of your fee be paid up-front.

"'Will they pay me, and will they pay me on time?'" are the key questions every business owner needs to ask about potential customers, says Dave Richards, who has run niche marketing firm Resort & Golf since 1990 in Bloomfield Hills, Mich.

"It sounds simple, but so important, especially now," he says. "I'd rather have one client that pays than three that don't."

Before accepting a new client, Richards calls his contacts within the business and checks with the potential client's suppliers. For a golf course, he'll go all the way to the company that sells them fertilizer or mows their grass to find out how timely the company is with its bill payments.

You're in a business where you'll have to spend a lot of time catering to a client's needs and wants, so it's essential to make sure you're personally comfortable with potential customers. All the legal vetting and paperwork in the world won't be as valuable as your initial impressions.

"Intuition is a real big part of this," says Ellen Delap, a Houston-based professional organizer.

Pay attention to the client's motivation, and whether it fits your business goals. Are they looking for the cheapest service, or are they looking for the best?

"We are always leery of working with a prospect whose sole motivation is saving money, because if they buy on price then they will leave you on price," says Lauren Brenner, president of the HR division of HCR Group, an HR and benefits consulting firm in Waltham, Mass. "We are looking to build an on-going relationship with our clients."

One final bit of advice: "Don't be desperate," says marketing specialist Winston. "You cannot be desperate, recession or not. Those kinds of clients pay you the least money and give you the most headaches."

Give us your advice: Check out recent “Ask & Answer” questions.

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Denise Haney, Orem, Utah
How can I get our clients to pay up? There's a fine balance between getting our money and losing them as clients – but when invoices are past 100 days, isn't it time to get tough?

By Kathleen Ryan O'Connor, CNNMoney.com contributor
It's tough asking for money, and no one wants to risk losing a client. But letting payments arrive on the client's schedule, not yours, is the quickest way to "nice" your way right out of business.

The first step, experts and seasoned business owners say, is to take the emotion out of the process and set up a system that works in your favor.

"Money is sort of a taboo topic," says Victoria Merriman, design director and founding partner at Digital Loom, a Boston Web design and branding firm. "I've really struggled to overcome that. One thing that is very helpful – be really, really transparent about the money."

In addition to contracts that spell out the scope of services and payment terms, Merriman's company builds payment dates into the project milestones that it shares with clients.

"They can see exactly when payments are due," she says. "Be really clear at the outset. That's helped a lot."

But if it's too late for a solid contract and friendly reminders, it's time to think about the best way to collect.

"Make contact right away," says Jennifer Katrulya, CEO of Business Management Resource Group, a firm that offers outsourced CFO and bookkeeping services from offices in Danbury, Conn. and Rhinebeck, N.Y.

If your client can't pay everything they owe at once, offer to set up a payment plan. You can also take payment in ways other than through checks: The Internet has made it cost-effective for even the smallest businesses to accept credit card payments. If you have a PayPal account, clients can send payment through it, and if you use Intuit's QuickBooks, you can link the two systems and automatically send invoices that include PayPal payment links.

Integrating an e-commerce system into your Web site is another way to make it easy for your customers to pay. Robin Robins, entrepreneur and founder of the Technology Marketing Toolkit, uses 1Shopping Cart, but there are plenty of others to investigate.

Accepting plastic makes getting paid much easier, she's found. "Of my 3,000 customers, 99.99% are on credit cards," Robins says.

If your client is still overdue and unresponsive, it's time to escalate your collection measures. One option is to go through business data aggregator Dun & Bradstreet. If your client is a business, D&B can act as a debt collection agency.

"It's a way to become a true creditor and get to the top of the pile," Katrulya says.

Beyond that, she says, it gets trickier.

You can go through Small Claims Court, which is inexpensive but time-consuming.

In your home state, Utah, you can try to recover up to $7,500 in small claims court. The filing fees are modest and you don't need a lawyer. According to the Utah state courts, it costs $45 to file for claims of $2,000 or less and $70 for claims of more than $2,000.

You could also contract out or sell the debt to a private collections company, but pay close attention to fees and commissions – it may not be worth it.

No matter what you try, some bills may never be paid. That's a frustrating reality for all business owners. Katrulya recommends budgeting for some percentage of your receivables to be written off as bad debt. Companies such as ProfitCents can provide information on bad-debt trends for your specific industry.

Former corporate executive and business coach Paul Lavoie of ActionCoach of Connecticut says that above all, you shouldn't worry insisting on getting paid on time will mean losing valuable customers.

He recalls a telecommunications client who had to buy a lot of expensive hardware upfront. He counseled them to change their invoicing procedure. Rather than laying out all that cash and waiting a long time to see returns it on, they created a new contract that requires customers to pay for 50% on signing, 40% on installation and 10% on completion.

"They didn't lose a single customer," Lavoie says. "No one blinked. They were blown away."

And what's the worst that can happen?

"You lose customers who aren't going to pay you anyway," Lavoie says. "When did you become a bank?"

Don't be afraid to start refusing service once customers are significantly late on their bills.

"I've had to take web sites down," says Web developer Merriman. "That really got people’s attention."

Anything you can do to make your service invaluable to clients' day-to-day operations will increase your chances of being paid promptly. As Robins puts it, "How do we make ourselves so essential to our customers we will be the last bill they will be late on?"

And at the end of the day, if asking for money is just too far outside your comfort zone, don't be afraid to delegate. In Lavoie's ActionCoach business, receivables go right to his no-nonsense business manager.

"Who doubles as my wife, by the way," he quips.

Give us your advice: Check out recent “Ask & Answer” questions.

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Tony Cantillo
How do I deal with unfair reviews of my business?

By Adriana Gardella, Fortune Small Business staff editor
Although you don't specify, I am guessing that you are troubled by reviews posted online – a plague among small-business owners (FSB tried, unsuccessfully, to contact you for details). If so, don't overreact. Instead, the first question to ask yourself is, "How much harm is the negative review actually causing?" says Anthony Wingrove, an attorney with Spencer Fane Britt & Browne in St. Louis.

"If a negative comment is isolated, it holds little sway in the court of public opinion," adds attorney Lance Raphael of the Consumer Advocacy Center in Chicago. "The solution to 'flaming' is not to sue, but to respond creatively." Raphael recommends that, after consulting with your attorney, you respond to the complainer with thanks and – gasp! – an apology, even (or especially) if you are not in the wrong. This is your chance to address the grievance, while possibly bringing the truth to light.

Can't stomach that option? Wingrove suggests that you begin a positive campaign by inviting loyal, satisfied customers to post reviews. For starters, it will make the negative comment less noticeable as it moves down the list. "People generally don't browse multiple pages of reviews," Wingrove notes. This tactic will also ensure that your griper is outnumbered by your fans, furthering the notion that whatever might have gone wrong was the exception to the rule.

If those strategies fail and your business is truly being damaged, litigation is an option. But Wingrove cautions that various factors, including the difficulty of tracking down an anonymous poster and the need for you to defend against any counterclaims that may be filed, will make your legal expenses difficult to predict. Something else to think about: You mention only that the reviews of your business are "unfair." They must be more than that to result in potential liability for the poster. When it comes to proving defamation, you'll typically need to show that damaging and verifiably false statements were made. Mere opinions are generally not actionable, nor are true statements.

This column provides general information only and is not intended to replace the services or legal advice of an attorney. Always consult a lawyer regarding any specific legal concerns, as laws vary from state to state.

Give us your advice: Check out recent “Ask & Answer” questions.

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