This week I was the guest of a friend at an event in town with a bunch of hot shots in the room. Most of the individuals were high powered, successful entrepreneurs and individuals who worked at magnificent companies.
When one gentleman in the back of the room was acknowledged, my friend leaned over and whispered, “He owes me $200,000!” He had what I might describe as a snarl on his face, knowing that he’d probably not see his money any time soon.
When discussing with a business associate about an individual who I was considering working with told me, “he is a lying, cheating, horrible person and he owes dozens of people money and has been in rebuilding mode for 10 years and won’t pay up”, was his response, I knew to stay clear of this individual and his business who promised to be a great working alliance. NO thanks!
As an entrepreneur, I’ve been the one paying out and the one paid. It’s interesting to work with companies who have a “Net 30 policy” or a “Net 60 day policy”. It’s all about Cash Flow. Cash in. Cash Out.
But what about the little guys? When you’re the little guy, a Net 60 policy doesn’t work! Even Net 30 puts a strain on the business.
As an entrepreneur, it’s best to have reserves so you don’t HAVE to be paid immediately but there is always a building process to get there. And what about those unfortunate times when they just don’t pay?
I’ve been stiffed recently. I haven’t been paid by someone I did work for. It’s not a huge amount of money and I know he owes other people even MORE money than he owes, me, but still, he owes me money! I have a contract for it, and he owes it. Unfortunately, he’s always “working on a deal” and hoping it will come through. Will I see it? Probably not. But will I do business with him again? Probably not!
Money is NOT something you MESS WITH. It’s important. It’s why we’re in business and it’s how we live. It’s how the world moves around and it SHOULD be the number ONE rule in business: DO NOT SCREW WITH SOMEONE’S MONEY. Don’t use it, don’t borrow it, and don’t say you’ll pay it back later.
Oh yah, unless you’re a bank. Or mutual fund. Then go ahead and use my money and make interest off it! (Wonder why we learned such bad habits!)
I have a client who has quickly become my favorite client of all time. The second I sent my invoice, he pays it. There is no waiting until he does the books, or until there is a convenient time, or waiting because all checks go out 2x a month. He values my consulting and he knows I’m building a business. He values me and I appreciate him. He knows I am working hard on his behalf and his gratitude to me is shown in how promptly he pays my invoices.
I am incredibly grateful. As a result, I see a new way of doing business. In his mind, it’s the way EVERYONE should do business. Pay people immediately! What a brilliant concept!
My contract states that we require deposits for all speaking gigs, and I get paid in advance for my consulting. I work with different firms and companies and the ones who are honest, on time and don’t dodge our calls when it comes to invoices are the ones we are serious about maintaining a relationship with.
What about you? Does your billing department need any tweaking? Do you need to adjust your own expectations about your vendors or your clients? Do you need to have any conversations with your employees or yourself?
My advice and request? Respect the little guy. Help him out when you can. Respect he or she is building a business that will give back and bring value to the world. And for goodness sakes, RESPECT people’s MONEY. PAY ON TIME. DON’T SCREW PEOPLE OVER and if you fall on hard times and can’t pay? APOLOGIZE. FESS UP and work your tail off until your debt is paid.
MONEY! MONEY! MONEY!
How you handle it gives you your reputation.
How you use it makes you a success.
How you invest it can make you a fortune.
How you share it will make you happy.
Integrity. Timeliness. Honor.
Make it count!