To recap, to make up for $1000 of unrecovered debt you'd have to generate $12,500 of new business just to break even.
However, there's a gold lining to this cloud.
Instead of focusing on the cost of a written off debt you should now look at the incredible opportunity this gives you to quickly and easily flood your business with net profits.
So here's how you should now look at your debts.
Let's assume that it would cost you say $200 to engage the service of a debt collection agency to recover a modest debt of say $1000.
Now again a lot of people may say "Why would I want to throw $200 at a $1000 debt? It just doesn't make sense.
Because if I don't recover anything then I'll end up losing $1200.
" However the reality is, this scenario of investing $200 to recover a $1000 debt is exactly the same as spending $200 to generate $12,500 worth of new business.
Now I don't know that much about you but I'm guessing you don't know of any quick and easy way to generate $12,500 with only $200! This is true leverage.
As you can see one of the fastest, if not the fastest ways to boost your net profits is to invest in systems to recover your debts quickly as well as systems to prevent bad debts from occurring in the first place.
And don't forget, if you've got proper terms of trade in place you can transfer all collections cost on to your debtors.
So ultimately it won't cost you anything to you recover your $1000.
Or put another way, it'll cost you nothing to generate the equivalent of $12,500 worth of new business! So now that you understand the extraordinary power of this formula and its impact on your take home profits you have no excuse for not dealing to your debts this very minute.
Because every minute you put this off is the equivalent of doing 12 and a half minutes of work for absolutely nothing! So I ask you, what really is the best decision for your business...
to stick your head in the sand hoping those cheques will arrive in the mail and all the while work for nothing OR take active steps to recover your debts today? Ultimately the decision is yours to make.
I trust you'll make the right choice.