- Do you drop what you are doing as soon as the mail comes because you are looking for checks?
- Do you go to the bank as soon as you get paid because you need that money NOW?
- Do you have to decide which bills you can let slide because you don’t have enough money?
If any of these things are happening to you, you are being distracted by cash flow issues. Not having enough money is demoralizing, time consuming, and exhausting. It also has happened to every one of my clients at some time or another. Below are some short term and long term solutions for you to try.
- Take an hour and call those who are late in paying you. If they don’t answer (people who are late in paying tend to NOT answer), leave a friendly, clear message. “I see you have an outstanding balance of $300 on our invoice #123. I’m going to email you a copy of it in case you didn’t receive it. Let me know if you have any questions. Thanks!” Then email that invoice immediately and request payment ASAP.
- Apply for a business credit card. This enables you to purchase the supplies necessary to keep running your business through this lean time. ***DANGER*** If you have a personal credit card which you can’t pay off and you are paying interest on, don’t take this step. Credit cards are only helpful if you know you will pay it off in full every month.
- Call a few of the companies that you owe money to. Let them know you are experiencing some cash flow issues. Let them know what you can afford to pay and when, and then do it.
- Spend Less: You are likely buying things you don’t need (latest iPhone? pizza for the whole company every Friday?) Examine every habit and bill and eliminate those that are not critical to your success.
- Earn More: Can you raise your prices? Over time, your supplies, labor, and overhead costs creep up. What you charged last year is not necessarily still a profitable price. Look into this periodically.
Every small business encounters cash flow issues, but they are stressful and they keep you from running your business. Do your best to keep a cushion of cash, so when the payments are slow, you can keep doing what you need to be doing.
Nobody likes to pay bills. It’s time consuming and not nearly as fun as making money. It’s one of my clients’ favorite jobs to foist upon me; I pay a lot of bills.
I’ve noticed there are two kinds of invoices: those I can pay right away, and those that confuse me. The confusing ones get put into a pile that I need to ask my client about. They will likely not get paid for weeks. How can you keep YOUR invoices out of the confusing pile? I’m glad you asked. Please make sure your invoice contains the following:
- your company name and address (this should go without saying, but, sadly, it does not)
- your phone number (in case I have a question)
- your email address (in case I have a question but I am shy)
- the word “invoice” (the words “transaction” and “sale” do not stimulate the pay gland in us bean counters)
- an invoice number (I want to know whether I have paid this thing before, and a unique number is the best way to ease my worried mind)
- a clear description (what am I paying for?)
Once you have made sure your invoice contains all of this information, then you have to be sure it is received. Emailing an invoice is fast and cheap; give it a shot. But there are people out there who will not take the time to print it and make sure it gets paid. Pay attention to which customers pay late and see if they do better with a real life paper invoice delivered by their friendly mailman.
Cash flow is a huge issue for most small businesses. You need your cash to flow in with the minimum amount of effort on your part. Take a few minutes right now and make sure your invoice is doing the job it needs to be doing.
photo credit: dlxlxry via photopin cc
Proud yet ridiculous
I’ve never paid much attention to Donald Trump; he’s always seemed a bit like a goat on a doghouse to me. But I recommend his book, Midas Touch (written with Robert Kiyosaki), to every business owner.
It’s an easy read, full of anecdotes and examples, and it makes total sense. It will help you to focus on the things you should be doing, and it will point out any problems you are trying to ignore. Some of the things covered are:
- Strength of Character – You will never be successful if you spend money on things you don’t need and you waste your time. If you can keep your temper in check, force yourself to do the things you don’t want to do, and learn to spot quality people, well, then there’s hope.
- Focus – If your job for the morning is to call potential clients and you hate that job, you will magically find twenty other things to do. Noon comes and you have checked e-mail 18 times, stared into space, interrupted your employees and changed your facebook status. Not productive.
- Brand – Your brand is what you stand for. Are you honest, family oriented, kind, competent? Let that shine through; people respect those things. If you are insecure and quick to anger, that will hurt your business. Get ahold of that.
There’s a lot to be learned from these two successful entrepreneurs. They’ve both made some whopper mistakes and had incredible successes. In Midas Touch they tell all.
As The Office Manager For Rent, I’ve worked with a lot of different people over the past 18 years. Million Dollar Monday is my attempt to analyze what my most successful clients (over a million dollars in sales per year) have had in common.
My most successful clients have been passionate about their businesses, but not in any way I would have guessed. For example: a landscape designer I used to work for didn’t ride with his crews every day to tell them where to place the plants. Nor did he look over the shoulder of the guy he hired to help design the new school campus. He didn’t even have much input into the graphics of the car wraps he put on his fleet. His passion wasn’t focused on what I would consider the fun parts of his business. Nor was he very focused on his company’s actual service. (He hired people to take care of that.) His passion and his time were devoted to the BUSINESS of his business.
He got excited about new opportunities and trends in his field. He knew exactly how many clients he had at any given time and how much he’d likely net for the month. He’d drive around to see which churches and businesses were paying outside landscapers. Then he’d run home and write-up a proposal to try to grab that work. He loved to talk to anyone who owned a business of ANY kind. And he read more books about marketing than he did about pruning roses. His focus wasn’t on the current details of his daily business; he looked ahead to what his business could be. He had a vision for his company and his vision was what inspired his passion. (And his vision worked: He got so big he no longer needed to rent an office manager; he hired one full-time.)
Passion and enthusiasm are not enough on their own. As a business owner, you have to be sure that your passion is directed in a way that will grow your company. If my landscape designer had focused his enthusiasm on deciding where every plant was to be placed, he’d have no time to grow his business. He would also likely annoy all of his workers with his butt-insky ways.
Here’s what I believe: That landscape designer could have been successful running any business. It wasn’t the particular industry he was in that inspired him. He was inspired by possibilities and challenges and the vision of a successful future.
In You Schmooze You Win, I discussed how my most successful clients have all been involved in the selling of their product/service. Apparently, to make a lot of money, the owner of a business must spend most of his/her time selling.
But I hate to sell; I am the opposite of a salesperson. How un-salesy am I? I have gone to the same gym for 13 years. I see hundreds of people almost daily and only three of them know that I run my own business. Those three people asked me what I do for a living and I told them. I am a sales failure.
So I’ve been paying attention to exactly what my successful clients do that I don’t do, and here is the secret: They Go After The Big Fish. They figure out what companies can benefit from their product/service, and they go after the biggest ones.
- They focus on business as opposed to individuals, because businesses spend more money. B2B, baby.
- They know their own business enough to understand what companies are likely potential clients.
- They do research to determine the largest business that might become a client.
That’s step one, figuring out which Big Fish to go after, and although it’s deliberate, it’s not salesy. I can do that. Step two is a little less comfy.
- They go to Chamber of Commerce meetings, networking meetings, and any events where ANYONE from their Big Fish company might be.
- They make a point to meet anyone from their Big Fish Company
- They follow-up: they call or email the people they met. They also make sure to attend future meetings, renew the contact, and persist until they have built a relationship. Sometimes this takes years; they persist.
To me, this is all doable. It’s not as salesy as I had feared. It’s deliberate and focused, but I can do that. If I can do it, you can too. Let’s go find some Big Fish and reel them in!
I am an amateur gardener: just how much of an amateur will soon be clear. My organic vegetable plot, fortified only by kitchen compost, grows whatever fruits and vegetables reseed themselves. This year I have slicing tomatoes, grape tomatoes, plum tomatoes: all in colors from yellow to red. But the best surprise was this watermelon vine. By early July it had this 6 inch fruit and I was psyched. EVERYONE in my house likes watermelon.
Tiners thinks pumpkins in August are stupid.
I let it take over. It climbed over my precious tomatoes and stunted my peppers with its shade. By the time I realized it was a pumpkin vine, it was too late. It’s mid August and I’m harvesting jack-o-lantern pumpkins at an alarming rate.
What does this have to do with your business? As an entrepreneur, you need to tend to your workers better than I tended my garden. You need to pay attention to the dynamics of your staff. If one employee gets disgruntled or insecure, discontent can fester faster than it took a pumpkin vine to strangle my garden. Pay attention to your employees’ interrelations and be prepared to step in. Nip it in the bud, as they say.
- When your employees interact, they should talk in a respectful manner, be willing to listen to differing opinions, and be tactfully honest.
- When things go wrong, your staff should focus on fixing the problem instead of hurrying to assign blame.
- Compliment your employees when you see them doing a good job. Ideally, they will pick up on your positive reinforcement and do the same with each other.
- Insecurity can wreak havoc on relationships. An insecure person will pick on others, often in the guise of “just messing around.”
- Negative people are exhausting. People who can’t shut up while you are trying to think are exhausting. Often they are the same person.
- A lazy worker in a group of hard workers will foster discontent.
Check in often with your employees. Focus on your goals for the team. Reinforce the good habits, and when you see employees who are fostering discontent, let them know. Likely they have no idea of the problems they cause. Like my pumpkin vine – they are just doing what they do.
Ice Dragon sculpted by Dawson List
I don’t have to look at a Profit and Loss statement to spot weakness in a business. All I have to do is listen. Any time I hear an employee shoot out a sharp exhale of breath, I know there’s a problem in that cave. That puff of air indicates frustration, and frustration is the fire-breathing killer of productivity.
Almost everyone wants to be productive. Your employees all WANT to do a good job and do it efficiently. They become frustrated when their efforts at productivity are thwarted. The problem is: most people don’t seem to see frustration as an indication that change is needed. Either they don’t realize how frustrated they are, or they know they’re frustrated but don’t think they can ask for a solution. . . I’m not really sure where the disconnect is. I have noticed that the source of irritation is often easily fixed. Some of the most common productivity-killers I have noticed are:
- a lame stapler – if you have to use a stapler 40 times a day and it jams every other time, that’s a lot of frustration and time lost. $20 fixes the problem.
- a bad mouse – if you see an employee slapping their mouse against the mouse pad in exasperation, tell them to order themselves a new mouse. They will love you forever.
- running out of ink – we all have printers and they all need ink. If you keep a constant back up supply of said ink, there is no problem. If you wait until the ink runs out and then have to have someone run to the store in the middle of the day because all operations have ceased due to the lack of a printer, frustration will ensue. Your employees can’t work without the proper supplies. Keep the supply cabinet filled with ink, paper, envelopes and stamps. It’s just good business sense.
- slow computers – I know – this one is a bit more complex than purchasing some ink. But slow computers are brutal to work with and something must be done. The good news is: some teenager you know can likely disable your cupcakes or add some rams or clean up your cache or some other thing that speeds everything up like magic.
These are just the things I have noticed lately. What drives you crazy at your job? Can you fix it?