For full coverage, visit the sources linked within the text of each category.

Pricing
Developing a pricing strategy begins with determining the true value of your offerings to customers. Charging either too little or too much may produce the same results: difficulty luring customers, poor cash flow and suspicions about the quality of your work. Try these low-cost pricing strategies from Darrell Zahorsky, international small-biz authority and Small Business Information Guide for About.com, and SCORE's "60-Second Guide to Developing a Pricing Strategy" to keep sales moving.

1. Competitive Analysis
See who else does what you do. Trade journals and professional organizations often publish baseline rates and fees for national, regional and local markets. Asking other entrepreneurs is also helpful, though some may be justifiably reluctant to discuss their fees with potential competitors. Be sure to learn the story behind these prices. Blindly charging the same as someone else may be inappropriate for your business or customers. Don't just look at your competitor's pricing — look at the whole package they offer.

2. Ceiling Price
The ceiling price is the highest price the market will bear. Survey experts and customers to determine pricing limits. The highest price in the market may not be the ceiling price.

3. Price Elasticity
If the demand for your product or service is less elastic, you can then have a higher ceiling on prices. Low elastic demand depends on limited competitors, buyers' perception of quality, and consumers not habituated to looking for the lowest price in your industry.

Once you understand the demand structure in your industry, review your costs and profit goals as set in your business plan or financials. The low price strategy is best avoided by small business, but there are conditions such as a price war that can drag a company into the lowest price battle.

4. Keep Prices Current
Similar, do not set your price schedule in stone. Monitor inflation, industry trends and your own costs to preserve your profit and marketability. Some variables that influence your prices may not become apparent until after you have been in business for some time.

5. Communicate
Be sure your customer is aware of your rates and surcharges before doing any work. If the customer wants to negotiate, carefully weigh the pros and cons of a lower fee. Is this a one-time project or the start of a long-term relationship with the customer? Will you still be able to cover your costs of doing business?

6. Reward Customer Loyalty
As you develop "regular" customers, consider offering discounts in return for a larger volume of work. Make sure this discount does not cut into your profit margin and that the advantage of staying busy doesn't limit your ability to attract or serve other customers.

All of this having been said, although every business should have an established pricing policy and process, it needs to be tailored to your industry and type of business. A pricing policy that might work well for a retail outlet might night necessarily work for a manufacturer or distributor. Learn what drives your customers to purchase your products, evaluate your ability to deliver value, and then establish the right pricing process and policy for your business model.

See also: SCORE's "60-Second Guide to Developing a Pricing Strategy"

Collections
Everyone's been stiffed somewhere along the line, and when it's money you've reeeaally been counting on, it can be a tough financial loss. Collecting on overdue accounts can be a frustrating experience for a small-business owner, especially during the startup period when every dollar of revenue counts toward staying solvent and repaying debts. Although it isn't the most pleasant part of being an entrepreneur, not handling charges and debts expeditiously will most certainly endanger your business's cash flow and long-term viability.

Here is SCORE's guide to establishing "a sound and rational policy for collecting payments," with some added tips from Barbara Brabec, author of several home-business books and publisher of The Brabec Bulletin:

1. Set Established Payment Guidelines
Establish a standard policy for payment, and stick to it. Some types of businesses may require all or a portion of the payment up front, while others allow terms such as payment within 30 days after receipt of invoice. Your invoices should also clearly state any surcharges for late payments. And make your customers aware of the policy before starting work: On your order form, brochure or Web site, clearly spell out your terms of sale and payment options.

2. Be Careful with Credit
If you provide goods or services on credit, develop qualification standards that are specific — yet fair, e.g., a good credit history from a credit bureau or good bank references. Put your credit policy in writing and make sure all involved understand it. As with the payment guidelines, you should have the credit policy spelled out in your store or available as a handout.

3. Find Out Why, Take the Right Attitude
Do not assume the customer is entirely wrong. Contact the delinquent account and ask politely for an explanation. It may well be that the invoice has been lost or is awaiting approval. A customer with cash flow problems may request extra time. How you proceed may be very circumstantial, so evaluate the situation and present options. Based on your experience with the customer, you may feel confident enough to allow extra time or installment payments. On the other hand, make sure you and the customer clearly understand any compromise. Be flexible but firm; and don't hesitate to follow up.

Your collections policy will do no good unless you enforce it. If you have met your obligation and a customer has not, you're in the right. Do not shy away from a potential confrontation, but avoid provoking it as well. Send a series of reminders, and be persistent in trying to collect. However, keep in mind that if you ever want to work with this client again in the future, you will use these collection methods wisely.

4. Take Stronger Action, Be Willing to Sue
If your collection attempts fail, it may be time to turn to an attorney or collections firm. Terms for these services vary; they may require a fee and/or a percentage of the invoice amount, or a retainer. Again, your course of action will depend on the situation.

As such, know when to quit. You may decide the amount of the overdue account does not justify the cost and effort to collect. If so, write it off as a bad debt and move on.

5. Don't Make the Same Mistake Twice
Now that's just common sense.

Yet if a customer with a poor payment history approaches you about working for them or restoring credit, perhaps you shouldn't immediately refuse — unless you are absolutely certain they remain bad risks. Ask them to explain how their situation has changed, and decide whether it makes sense to restore the relationship. As a precaution, insist on stricter terms such as advance payment or cash-only.

We do NOT suggest going about collecting what's owed you this way: Debt Collectors Gone Wild.

Visit SCORE for more 60-second business guides.

Resources

Pricing Strategies for Small Business
by Darrell Zahorsky
Small Business Information

60-Second Guide to Developing a Pricing Strategy
SCORE

60-Second Guide to Collecting Payment
SCORE

Small Business Collection Strategies That Work
by Barbara Brabec
An excerpt from "Homemade Money: Bringing in the Bucks!" © 2003, via Business Know-How

Debt Collectors Gone Wild
ABC News, Jan. 18, 2007