Soapweed's Ranch Ramblings
The writings of a Nebraska Sandhills cattle rancher!

Running a Downtown Business
Feb 13, 2004

One thing about ranching, and selling our "produce" through a sale barn, getting our paycheck doesn't seem to be much of a problem. You can run cattle through the ring, watch them sell, and five minutes later pick up the check for the value of the cattle; then be on your way. The sale barns are licensed and bonded and the check is good. Once in a great while, you hear of a barn that went "belly up" and someone gets burned big-time if they happened to sell quite a large bunch of cattle on that particular day. Fortunately those occasions are very rare. It is one reason that I don't like to have "all my eggs in one basket" so to speak, and spread out our calf sales over four or five weeks. Also, by doing this we get to take advantage of riding out the averages over the fall selling season.

My son has a welding shop. He is starting to realize there is a reality check in getting some of the money that is owed to him. For the most part, his customers pay in a timely fashion when their bills are due. But, as you would almost expect, there are some that don't try very hard.

One mechanic shop that I did business with for years, operated in the building where my son now has his shop. Their policy was to mail out bills on the first day of each month. If the bill was paid by the tenth of that month, you could deduct 2%. Needless to say, we always tried to pay ahead of the tenth. For bills that weren't paid by the end of the month, that drifted into the next month, a 1.5% late charge was added each month. This amounts to 18% per year and there is sure no reason to not pay your bill. If you had a $1000 bill, if paid before ten days you got by for $980. If it drug on for a year, the bill would come to $1180, if you weren't hauled into a small claims court before that.

Mueller's Feed Mill of Martin, SD, is a good business that puts out quality feed. My dad was one of their first customers about 45 years ago when they first started up, and we have done business with them ever since. They have a policy that encourages customer loyalty. For every ton of feed that is purchased in one season, the next year they give a "tonnage discount" of $4 per ton off their regular price. If you buy a hundred ton of cake one year, and buy that much again the next, you save $400 dollars on this tonnage discount. Another thing that works for them is if the bill is paid within ten days of the time feed is delivered, a 3% cash discount applies. This is a pretty good reason to pay in a timely fashion.

If I were running a downtown business, "cash and carry" would be best. If credit needed to be offered, I would sure give a discount for early payment and make a pretty stiff penalty for the late payers. Hope I can get down off this soapbox without hurting myself.






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