The Desert of Arizona
Sunny 42 Degrees
There’s a big difference between selling a lot of services and actually having the cash show up for those services.
Moving to a “payment in advance” mode of operation helps this a great deal. So I’d recommend that as the best way to go.
What if you can’t? Or more appropriately, what if you think you can’t?
Well, the challenge is figuring out how NOT to make your cashflow subject to unnecessary interruptions.
Say you get a new project from a client. You are paid 50% on commencement and 50% when the project is completed.
But then the client’s cat gets run over by a bus and all hell breaks loose. I’m not sure what proper etiquette is for a pet “death by bus” situation, but most likely, the project is going to get delayed while the owner deals with that.
The reality of the situation is that your cashflow gets caught up with the cat.
How are you supposed to deal with a situation where your cash is getting delayed by events outside of your control?
The most effective way is to make sure you don’t get into situations like this.
If full payment in advance isn’t an option for you, then put your payments on a TIME schedule, not a deliverable schedule. That way, your payments can be made on time despite what’s going on with the project.
It’s hard to do this when everything is already in motion. It’s NOT hard to do this before the project begins.
Just go in knowing this is how you want to work.
Facebook Q&A starts in a few minutes. Come one over…