MODERN ENTREPRENEURSHIP
payers you will run out of cash and
be broke. It is vital to avoid clients
becoming debtors longer than the
agreed terms. Start-ups need clients
and must not confuse non payers as
clients. Bad payers are worse than
the company’s competition. They are
the enemy within. To manage slow
paying debtors withdraw your service
and suggest that they try your
competition. Then send the debt to a
debt collector. That way you are free
to sell to customers who will pay on
time.
Buy and pay wisely
Whilst purchasing equipment
and services for start-up is time
consuming it can be a vital part
of the long term survival plan.
Naturally you want the best deal
possible. But remember that price
is not everything. Look for suppliers
who offer a monthly account.
Any account is better that paying
cash. These suppliers that you are
approaching for an account are
about to become your creditors
because they are about to give you
credit. Therefore, when they give
your start up a monthly account you
owe then money. This is a golden
opportunity for good managers.
Debtors are to be collected quickly
and creditors are to be managed,
slowly. The goal is to have a fast
debt collection, you get the cash in
and give it a good long term home.
Paying creditors as slow as the
supplier will allow keeps your cash
in your bank account. Managing
your creditors skilfully can assist in
funding your start up.
Work-Life Balance
The folks who advocate this are
usually full time employees rightfully
claiming that life is good because
they are satisfied. Power to them.
They should not be involved in a
start-up. Commencing a start-up
is the exact opposite of balance
of anything. It is total commitment
to the goal. Nothing but nothing
replaces total commitment. The
desire to give it your all was the
reason behind setting up a start-up.
So when you meet the life balance
advocate, remember…they have
lesser goals than you. Their choice.
It’s about you
Start-ups may seem friendlier than
large organisations because they
often have a small number of staff
who openly share the enthusiasm
for the new product or service.
Happy staff will not always provide
the best outcome for any business.
Productive staff with set goals that
produce outcomes of the business
will. Remember that you go into
business for yourself because you
want more than you could get by
working for others. A risk when
managing a small team is that
the owner can be working to keep
the staff happy at the businesses’
expense.
Remember, the goal of a start-up is
to survive the start-up stage. The
highest risk is not always whether
the market accepts your product
or service but will you have enough
capital to see the business be viable.
No matter how exciting your venture,
to survive it will require good old
fashion management of cash.
Alan Manly is an entrepreneur with
extensive experience owning and
managing SMEs. He is also the author
of When There Are Too Many Lawyers …
There Is No Justice ($24.95), visit www.
alanmanly.com.au.
April 2016
ModernBusiness
19