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Nick Kozak for the Toronto Star
Case Studies
Posted: January 29, 2013
by Roger Pierce

Simply Paid solves cash flow problems, but entrepreneurs aren’t buying

Vital Stats
Company Name:
Simply Paid
Owner:
Ian Fearon
Contact:
416-948-9582, 1-888-516-8816, ian@onsitecreditgroup.com
Field:
Cash flow management, receivables and software as service
Employees:
Years Active:
1

A product that offers a solution doesn’t automatically equal sales. You first have to convince customers they have a problem.

But educating the marketplace before you sell requires a long-term play – and plenty of investment. It’s something few small businesses can afford.

This is the conundrum faced by entrepreneur and former corporate credit manager Ian Fearon. His new service, SimplyPaid, solves a critical problem that sinks many small businesses — managing cash flow, collections, and receivables without an onsite credit manager.


“No matter what product or service you provide, if you don’t get paid on time, you put your company at risk,” he says.


But SimplyPaid isn’t selling.

Built as Software as a Service (SaaS), SimplyPaid is an internet-based solution that does not require installation. It’s fully automated and works by delivering a series of timely reports revealing which customers are past due or over their credit limit – and automatically asking why they aren’t paying.

SimplyPaid also provides options for contacting customers regarding outstanding invoices, and accesses customer master files in off-the-shelf office accounting packages such as QuickBooks and Simply Accounting for easy integration with existing software.

With a point-and-click set-up process, the typical user can be running in an hour or so, mitigating the need for potentially expensive IT help.


Building such intuitive software wasn’t cheap – the money came from Fearon’s own pocket and the coffers of his consulting business, Onsite Credit Group.


“From kitchen table idea to finished product, I’ve invested $15,000 on programming fees, and a year of my time – worth approximately $100,000,” he says.


Fearon didn’t spend that cash lightly. With 30 years experience as a corporate credit manager for large companies, including Phillip Morris, Motorola and Hitachi, he has a deep understanding of the issue SimplyPaid solves. He’s also the author of Paid: A Guide To Credit And Collections for Canadian Business Owners, and, in 2008, he left the corporate world to coach small businesses about credit. In other words, he’s confident in his understanding of the tool’s target market.

 

It was this understanding that led him to notice a hole in the marketplace; businesses with less than 25 people often lack an onsite credit manager to oversee receivables.


“Receivables occur when a company sells products or services on credit terms,” explains Fearon. “If a business owner doesn’t manage those receivables, he or she can put the company at risk.”


Because these companies are so small, business owners develop personal relationships with customers and feel awkward or uncomfortable asking for cash when payments are due. And, depending on the size of a debt, owners may be hesitant to press hard for fear of losing customers – if they’re even aware that accounts are going unpaid.


“Asking for money is not what the business owner does well,” says Fearon, who developed his software to solve this problem and ensure owners know when debts are past-due.


“My biggest challenge is reaching out to my target audience – small and medium-sized business owners,” says Fearon.


SimplyPaid starts at $39.95 per month, and is a unique service in the marketplace. Fearon says indirect competitors, such as supply-chain management software called AvantGard, do exist, but none are specifically tailored to small businesses.


“For the cost of a cup of coffee a day, you can manage your receivables,” he says, adding the product can improve cash flow by up to 30 per cent, and remove the hassle of making collections calls.

Despite these advantages, the company – launched in June 2012 – has yet to secure any subscribers. Marketing efforts to date have included email, telemarketing and cold-calling campaigns. Fearon has also launched a blog and promotes the software through the Brampton Board of Trade. He’s personally spending 20 to 30 hours a week on the phone, networking, or working on other marketing efforts.


These efforts may never translate into sales.


“Traditional marketing approaches are ineffective for selling new concepts,” says Jeremy Miller, a Marketing Consultant with Toronto-based advisory firm StickyBranding.com. He says companies are inherently resistant to new approaches.

“Change is difficult,” he says. “The onus is on the brand to educate the market, and mitigate buying risk.”


To remove those purchase worries, Fearon is considering offering a 90-day trial version of his service.


“I’m reluctant to do it” he says, “but I may have to so business owners can experience all of the benefits offered by SimplyPaid.”


Despite the challenges, Fearon remains committed.


“I will never give up on this project. I’m absolutely convinced there is a market for this product,” he asserts. “I’ve built a better mousetrap, now how do I tell the mice where the cheese is?”

EXPERT VIEWS

As Interviewed by: Tom Henheffer

Fearon isn’t doing a great job of explaining what value Simply Paid offers on his website. You need to hook small business owners quickly, especially online. So, I’d work on my landing page to get a kind of digital elevator pitch upfront. And I’d also work on SEO to get more eyes looking at that pitch. If you put Simply Paid into Google Fearon’s site is the first result, but no one out there knows the name of the software yet. So he needs to add the right content and use the proper keywords to get listed high in the results of what people are actually searching for. This can be tough to do on your own, so contracting to a service like Rogers OutRank might be a worthwhile investment. Finally, partnering with a bank or other financial institution could lend his product a huge amount of legitimacy while exposing it to a larger audience. All the banks are working to diversify into the small business sphere, so his program could become an important value differentiator.

by Tisha Rattos - Rogers

It's great that Fearon is trying to improve cash flow for business owners, but there’s no tension for change. Low interest rates and good access to credit mean improving cash flow just isn’t a major issue today, and it’s hard to get people interested in your product if they don’t see how it solves a problem. Plus there are existing programs available. Sage, for example, is popular software that can produce these same reports and also create invoices, track and accept payments and do sales quotes. It won’t be easy competing with a product that offers more features. I’d recommend Fearon change his focus from improving cash flow to loss avoidance. A bank can afford a $50,000 loss on receivables, but most businesses can’t, and there isn’t much out there to inform entrepreneurs on how much they can safely sell on credit to business customers. Creating an offering that would let owners know the maximum amount of credit they can safely extend could be very helpful. If Fearon can pivot and provide this service, he may be able to start generating more sales.

by Peter Conrod - RBC

Fearon started with a “build it and they will come” approach to marketing his product, and now he’s kind of acting as a door-to-door salesman telling people they have a problem and he has a solution. This has saddled him with a program that highlights when money is owed, and this doesn’t help business owners. Their problem isn’t ignorance, it’s being afraid to alienate customers by demanding payment. No software is going to fix that, especially in a shaky economy. Fearon created the program based on his own ideas, when he should have gone out and consulted with small business owners to discover their real receivables issues. He could offer free trials to potential clients now and start the research and beta process that he should have carried out at the beginning. But if he hasn’t had sales after two years, he won’t get sales now. To be successful he’ll have to use this time to gather feedback and change the software, because, as it stands now, I just don’t think there’s a market for this product.

by Steve Tissenbaum, Ryerson