4 FINANCIAL MISTAKES BUSINESS OWNERS MAKE

Entrepreneurs around the globe need to settle on the hardest choices, and do so consistently to properly influence their organizations. It can be hard to settle on the best choice for your organization, but then again numerous operators battle with settling on the correct decision. This article centers around providing the costly monetary errors that entrepreneurs make every day.

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Time is of the Essence

Time is a powerful thing. In some circumstances in cannabis time can be your friend. Taking an extra day to review a contract, great idea. Giving your plants an extra week to flower, so they can reach optimum potency and flavor profiles, is a good idea. Leaving your freshly blasted concentrate slab in vacuum ovens for an extra 12 hours so it purges properly, is a great idea. Taking the extra time, to hand manicure and trim your bud, is a great idea. A many number of things in cannabis benefit from extra time. However cannabis debt collection is most certainly an exception to that rule.

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Collection Agency vs. Small Claims

As with any comparison of two things, there are always the pros and cons. Below is an outlay of the comparison of using a collection agency versus taking your debtor to small claims court. We have tried to remain as objective as possible. There are pros and cons to each side of the equation and many of the pros and cons reflect the cons and pros of the opposite side. 

The real question to be asked: Is your time worth more than what you would pay in a collection agency’s contingency fees?

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Cody Ziering
5 Red Flags Your Client is About to Become Your Debtor 🚩🚩🚩🚩🚩

The “honeymoon” face of your client relationship was extremely positive and exciting. Making the sale, sending the invoice, delivering the product, all seemed to be smooth sailing. However, your customer isn’t writing checks when payments are due, how are you supposed to know if it is time to send this client to collections? There is a point where you need to recognize your cash flow exceeds the importance of an irresponsible customer. 

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Cody Ziering
The Risks Of Not Using A Collection Agency

This blog post isn’t meant to scare you. But it is meant to be a reality check.

Think of all the things that can threaten your business. There are so many, but here is a list of things that should concern you as a business operator. 

  • A change in the marketplace
    • Like an oversupply of competing products
    • In Oregon, prices of outdoor plummeted to $50/pound of flower after the last harvest season
  • A change in the legal landscape
    • New regulations have limited your efficiency
    • A pesticide or procedure has been outlawed in your market
  • A disgruntled employee becomes a saboteur
  • Your accounts receivable grows to an unmanageable amount effecting cash flow 
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Cody Ziering
Four Simple Credit Clauses That Will Save You Thousands

Extending credit is part of a healthy business. Few things are more important for those businesses extending credit then having a strong credit agreement/application.

Credit agreements need four crucially important clauses. These four clauses will determine if a debt is collectible or not collectible should your client default on payment. Without these clauses, it can be virtually impossible to collect on your business debt and cost many thousands extra.

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Cody Ziering
CannaBIZ Collects Credit Contract Review

If you and your cannabis business is thinking about extending credit but hasn't yet set up standards and procedures nor had its contracts reviewed by a professional attorney, then you need to call us! 

Why reinvent the wheel through trial and error, causing you to have clients that become debtors. CannaBIZ Collects will set up your entire Accounts Receivable process allowing your business to extend credit with confidence, while at the same time mitigate the risk from doing so. 

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Cody Ziering
Case Study 1: $200k recovered for Hemp/CBD Producer

Some time around July of last year, a large Hemp/CBD manufacturer approached us asking for help and advice. They had several large accounts on their books that were way beyond 90 days past due. When they called, they had five accounts past due (with another three aging past due in the coming months). Three of these accounts were each over $75,000, with the rest totaling another ~$50,000 (to save you time on the math in your head, there was a total of ~$275,000 outstanding past due).

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Cody Ziering
Avoid Sharing The Road With These 3 Types of Debtors

In business it’s common to experience a situation where you are “owed money”. Throughout the long road of starting a business, entrepreneurs work relentlessly to ensure quality products/services, seek and train highly motivated sales representatives, provide excellent customer service, and even extend credit terms. However, as the business begins to pick up momentum, debtors can cause major accidents on the road. As your business is driven with prestige, backed by discipline, organization, positive cash flow, and strong leadership, it is inevitable you will unexpectedly find yourself near at least one of these three classes of debtors.

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Cannabis, BusinessCody Ziering
Pitfalls of Collecting Sales with Salespeople

As a business owner, there are an endless number of tasks to complete and an unseen number of issues that arise without notice. Often times, the business operator wishes there were 30 hours in a day. Of course, as we all know, this is simply not the case. In order to scale an organization, a business owner must delegate certain activities to staff. When the business started, the owner was happy to be on the road selling their own product, but as the business has grown the owner’s skills and knowledge are now needed elsewhere.

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Business, CannabisCody Ziering
Sales and Collections

Your sales team can sell. It's what they do. And they do it well.You have cultivated the right training & environment for their success. Every day they make countless connections for your business. And each day they bring in dollar after dollar. Now the sales machine is humming right along! Are you making the mistake of having them collect?

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Cody Ziering
Does your Canna-Business Offer Credit?

Cannabiz Collects knows the cannabis industry. We also know credit worthiness and debt collection. We believe that offering credit will help our blooming industry to grow and blossom! 

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Using a Lawyer vs. a Collection Agency to Collect Debt

If your letter writing, personal meetings, and phone calls have all failed to resolve a debt issue, it’s time to call in a professional — a debt collection agency or a lawyer specializing in debt collection.

The most obvious choice to collect an unpaid debt is a collection agency. Agencies come in all sizes — some are local, some specialize in handling certain kinds of debts, and others are national in scope. The cost varies, depending on the volume of business you bring to the table, and the amount of debt that is to be collected. Plan on paying 25 to 30 percent of the amount collected, with some agencies demanding a 50-50 split.

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Don’t Let Your Green Go Up In Smoke

As new cannabis investors and entrepreneurs hasten to enter the Green Rush, many, if not all, feel overwhelmed. A solid vision, business plan and novel product offerings are no longer enough to break through in this competitive marketplace. Business owners and operators spend countless hours on permits, compliance, financing, taxes, licensure, hiring staff and employee benefits, yet all that valuable time, energy and money is meaningless if reliable accounts receivable (A/R) methods are not in place. For today’s cannabis business owners, the Popeye cartoon character Wimpy’s catch-phrase, “I will gladly pay you Tuesday for a hamburger today,” doesn’t cut it in today’s environment.

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Cody Ziering
How To Collect Your Money Without Disrupting Relationships

We are owed $50,000 by one of the largest retailers in the state, but we don’t want to ruin our relationship with them!” As collection experts, we are approached constantly with similar examples of clients worried to collect the cash they are yet to be paid. As our founders worked in the cannabis industry themselves, CannaBIZ Collects was formed to act as a responsible & respectful liaison to recoup outstanding A/R balances for their clients

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