Set Simple Strategies in Place to Keep Your Financial Faucet Flowing:
For entrepreneurs just starting out, or even entrepreneurs in the middle of a transition or period of growth, waiting by the mailbox (or PayPal account these days) for the arrival of an overdue payment can be an impediment to the progress of your business.
As with most other avenues of your entrepreneurial empire, it is essential to have sound strategies firmly set in place.
When businesses allow problems with their receivables to get out of hand, small problems can quickly grow large, potentially effecting the entire business. This is worst when it seeps into an entrepreneur’s private lives. Stretched mortgages and mushrooming credit card debt is no way to foster a healthy business.
There is nothing more destructive to an entrepreneur’s momentum than watching their financial infrastructure weaken and crumble right before their eyes.
The smart entrepreneur knows they must take charge. This means dealing with the problem while it is still small and easily manageable.
The best tactic is to know what you are doing ahead of time so you are not designing policy on the fly. This means discussing your expectations with your clients or vendors ahead of time. Establish your rules and stick to them. Having a contract in place beforehand is always helpful. Decide on a payment schedule with fixed due dates, and respond to problems as they occur rather than allowing them to mount. Do your best to focus on those clients who are consistent payers, as they not only tend to value your business the most, they are also the ones who will best help you take it to the next level.
Being an entrepreneur means that there are no guarantees. However, it is simple enough to set some basic structure in place that will help you not only maintain consistency with your cash flow, but your peace of mind as well.
