Firms accommodate late payments

BRADENTON — Since August, small business clients of Integrated Tech Support have struggled to make payments on routine computer services.

Donald Scheid, owner of the Bradenton-based business, says it’s not unusual considering the economy has caused about 50 percent of his estimated 100 or so clients to become “cash-flow poor.”

“Around August, we started noticing a lot of our regular clients, clients who normally pay on time, were having difficulty,” Scheid said.

With a number of service-based businesses locally seeing late or missed payments as a result of the economy, more flexible approaches are being used in handling financially strapped clients. Business leaders say finding ways to work with regular customers experiencing financial problems is a benefit to both the client and the business.

“They’re reinventing themselves, trying to accommodate people in any way possible,” said Bob Bartz, president of the Manatee Chamber of Commerce.

In the long run, Bartz said it best serves businesses to accommodate loyal customers.

“If you’ve had a customer for a number of years and he’s been paying on time, you don’t want to abandon him at this point,” Bartz said. “You certainly want to keep him as a customer so when the economy turns around you still have their business. It costs so much money to establish customer relationships.”

Cash-strapped customers are changing the frequency of their services or stopping them all together, says Jerry Osteryoung, director of outreach of the Jim Moran Institute for Global Entrepreneurship at Florida State University’s College of Business.

“Many are not spending money on needed items and services in an effort to conserve cash,” Osteryoung wrote in his weekly syndicated column. “And many others are not spending for fear that things are going to get much worse.”

Nick Racanelli, president of Webtivity, knows this firsthand. The Bradenton company, which has a client base of about 500, has seen a 2 percent to 3 percent decline in renewals for Web site maintenance or hosting services.

“That’s a lot for us,” Racanelli said. “And, it’s not that they’re going somewhere else, they’re just stopping. To me, it’s mind-boggling because the Web remains the most cost effective way to market your business.”

Webtivity’s one-time Web site design and development startup costs range between $500 and $20,000 depending on the size and scope of work. Hosting fees range from $15 to $50 a month.

“Typically, a lot of the smaller business that we have, have stopped hosting their Web site all together,” Racanelli said. “And, a lot of our clients instead of prepaying for a yearly hosting plan, pay on a month-to-month basis, reducing their initial out-of-pocket expense.”

Webtivity is launching a new service in which the company will create a Web site for a business, but maintaining the site will be left to the client.

That would include a set-up fee of about $500, but would be ideal for customers who want to avoid a long-term contract, Racanelli said.

“It’s a low entry solution for small businesses,” he said.

ACME Termite & Pest Control in Bradenton also has seen customers change the frequency of their services to cut costs.

“Instead of monthly services, some of them are changing to every other month or every three months,” said owner Angela Coleman.

ACME has about 100 multi-property accounts. About 15 have changed their service schedules.

“Less frequencies does affect our bottom line, but we want to offer anything to help them so we can keep the customer,” Coleman said.

Coleman said ACME is delaying late fees for some clients so that they keep the business’ services going.

Osteryoung said one way businesses who have cash or credit available can help is providing financing for customers and allowing them to pay over time.

However, Osteryoung said businesses should make such deals with clients who are credit worthy and such an arrangement should be accompanied with a legal contract. “Extending credit to a company that is about to file for bankruptcy is not good business,” he said.

Superpool Services, a commercial and residential pool maintenance company in Sarasota, recently began offering clients the ability to pay by credit card.

Owner Sue Pashley said the company implemented this after seeing a lot of late payments from customers, which has created additional responsibilities for accounting.

“We have to keep on top of our payments,” Pashley said. “We are invoicing ahead. At the end of the month we send out our statements for the next month.”

And, the YMCA in Bradenton is paying more attention to membership terminations and trying to help clients whose discretionary spending may have dwindled.

“Our aim is not to turn anyone away if they can’t financially afford it,” said Lisa Strutt, membership and marketing director.

The Y is trying harder to tell people about its scholarships, which use income information to base fees on a sliding scale.

To continue recruiting new clients, the YMCA is offering a special no joining fee in January for new members. It also is offering free memberships for a year to the immediate family members of deployed military members.

“We talk to them on an individual basis because maybe their pride is in the way and they don’t approach us,” she said.

The tough economic times also is impacting health service industries.

Dr. Sarah Mackie with the Eye Center, Inc. in Bradenton, said patients are putting off eye exams and making do. “People that usually come in yearly now don’t come in for two years or wait until their glasses break,” she said.

Others are cutting corners when they need new eyeglasses. “People will use their old frames and put their new lenses in those,” she said. “People aren’t upgrading to designer frames.”

Mackie said the practice has seen more requests for their annual donations of free eye exams and glasses to needy school children. To help out, the practice is donating more services such as free eye exams and contacts to silent auctions and fund raisers.

“People are seeking those kinds of things out because it saves them money,” she said.

— Herald business editor Jennifer Rich contributed to this report.