What Successful Business Owners Know
If you've been watching the news lately, you've seen all sorts of coverage on the stock market crash, the housing bubble bursting, the government bailout package, the credit crisis, and the overall recession that we are in. With all these economic issues occurring, and the uncertainty of the upcoming election and what it means for you and your business, I'm guessing that you're feeling a little uneasy these days.
As a business coach, I always welcome problems and frustration. The reason for this is that when these things happen, they are always great opportunities to learn and grow! In order to be a successful business owner, you have to be constantly learning and growing to be successful. One of the quick ways to grow is to learn from others. One of the key things that I have learned that all successful business owners do is this:
They get paid up front! You may be wondering why this is important. Well, here are the key reasons that successful business owners make sure they get paid up front, and why you'll want to as well:
1. You'll eliminate cash flow issues
The number one reason business go out of business is cash flow issues. If you have been paying attention to the news lately, one of the key issues is the ability of businesses going forward of being able to obtain short term credit so that they can make payroll each week. If your business gets paid up front, you completely avoid this issue. Also, when you provide terms for your clients to pay you, you are in essence acting as a bank and giving them credit. When you do this you take the risk that they won't pay on time, or, worse yet, they won't pay at all.
2. You'll eliminate collections
When you get paid up front, you eliminate the need to spend time, energy and money hunting people down for payment. This can be a major cost to your business, and is completely eliminated when you get paid up front.
3. You'll have additional cash to invest in your business
Getting paid up front allows you to have cash readily available when you need it! For example, right now there are tremendous deals to be had on equipment, office space, and other things that you need for your business. If you have cash readily available, you can take advantage of this.
4. You'll attract better clients and customers
If you allow generous payment terms to your customers, you are going to attract customers that have issues paying you. By in essence becoming a bank for your customers, you are encouraging them to leverage their cash with your credit and terms. By making it a policy to get paid up front, you attract the good customers that are able to do this, and end a lot of future headaches in the process.
Getting paid up front is a trait of a well run business. This may be a shift for you that may be a little bit of a challenge for you to accept. Taking advantage of this distinction can make a huge difference in the success that you have going forward, so I strongly suggest you consider and take advantage of this key to running a successful business!
