Learning to be bolder in business through mistakes
Nearly every business owner will run into some bad luck at some stage. In the early days, the most common runs of bad luck are to do with underquoting, late or unpaid invoices, ineffective marketing campaign, or a product that never gained any traction.
Although it’s quick to dismiss these as “failures” that’s not strictly correct. They’re only failures if you continue to repeat them throughout the life of your business.
However, if you make a necessary change to your business to stop them from occurring again — pivoting away from 30 day payment terms, for example — then these events are more aptly described as a learning curve, or better yet: experience. And it’s from our mistakes that we gain experience.
Experience is crucial to success
There’s a lyric in a Fleetwood Mac song, where Stevie Nicks sings, “Time makes you bolder, children grow older, even I’m getting older too.” What she’s saying is that the more experiences you have, the more courageous your choices become; choices you mightn’t have had the nerve to make when you were younger — hence: children grow older, even I’m getting older too. (And bold enough to quote Fleetwood Mac lyrics in my business posts.)
The same applies in business. The more experiences you have in your business, the bolder you’ll become with your decision making. You’ll come to learn that you shouldn’t extend your payment terms for new clients you haven’t worked with before; or wave your deposit. And you’ll stand strong with late-payers, too. But it takes the bad experiences, as much as it does good ones, to get there.
Some practical tips to keep on running
There are myriad reasons a business can experience poor cash flow. Sometimes it’s due to late payers, or a big client that suddenly goes away; other times it’s outside your control — recessions or sudden tariffs on trade in a major market.
The key to managing your cash flow problems is to immediately reduce all non vital expenses, with the exception of marketing. Many businesses immediately pull back on their advertising or marketing when cash gets tight, but this is counterproductive, especially if you’re seeking new business to get you back on track.
Then you should implement strategies to avoid this problem, as best you can, in the future — or, at least, weather it better, in the case of changes to government policies, for example. Shift your payment terms from 30 days to 14, and put serial late-payers on notice that they’ll have to prepay your service in the future.
Rather than only working for one or two big clients, try and work for several medium-sized clients, plus a number of small ones too. That way, if one or two go away, it’s not such a catastrophe.
It’s no good being Mr Nice Guy or Ms Nice Gal in business if you’re unable to pay your bills. Be firm, but fair; and remember: Time makes you bolder.
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