Learning to survive financially until the business starts producing some revenues is a vital skill for entrepreneurs.
Find here some priceless tips.
Use two bank accounts. One for payments , other for collections.
The idea is simple, but often ignored. If your incomes go into the same account where you have your direct debits you will have no control on the cashflow.You are not the one assigning priority to payments but chance will.
How many times an unsuspected direct debit has taken the funds that you had for this really crucial payment?
This is solve by having too accounts. The cost of keeping them is insignificant. Then you can decide who should be paid first.
Issue invoices immediately, and with a due date.
Many entrepreneurs are so busy working that they have no time to invoice!. Do you identify yourself with this statement?
I do. But is it not true that your clients won’t pay until they receive the invoice?
This might seem obvious but it is something we need to remind ourselves form time to time.
AS important as issuing the invoice quickly it is to assign it a due date. If you send the invoice with an open payment time, such as “ pay when convenient”, most likely you will get what you ask for.
(And when is it convenient to pay?)
A due date impresses in the mind of the receiver the commitment to pay and it gives you a reason for a phone call to remind them in case of no reply.
Why not, when you have just finished the works, use our Mobile App Quipu to issue the invoice. Your client will receive the invoice when he is still happy to see the result of your good job.
Don’t get all your critical services from the same company.
Aircrafts can fly on one engine, but if they only have one….
Most telephone companies offer great packages including ADSL, mobile lines, landlines… along with a free 4K TV if you buy it all. Wrong!
As a starter your will find yourself penniless many times. What if if you can’t pay the telephone bill and get the line cut-off.
Sure you will agree that your business cannot survive without communications. You will go crazy that day to get the bill paid and the service re-stablished.
If you had two companies, one for mobiles and other for ADSL and landline, for instance, the matter will won’t be that urgent.
There are other reasons why one of your supplier may fail beside delaying in payments. Surely you can extend the principle to other critical services.
This is a open article and we will add more tips soon.
Do you have other tips that work for you that you would like to share with other ?
Share your tips in our facebook and we will add them here along with a acknowledgment of the source.