What distinguishes entrepreneurs from mere dreamers who don’t have the ability to actualise their new business idea?
Entrepreneurs know what they want to do and how they are going to do it. They learn the rules of the marketplace and know how to deal with people – all types: smart, hard-working, charming, brilliant, slack, cunning, lying, cheating and thieving.
Dealing effectively with people whether their own employees, customers or suppliers makes entrepreneurs successful. Studies have shown that success in business is more related to dealing with people than only the technical side of the business.
But mostly entrepreneurs possess an excellent grasp of the details and facts of their business. To actualise their vision nothing goes unnoticed. This applies to cash flow management and credit management as much as it does to marketing and sales.
Big companies are staffed by people who have all sorts of agendas but hardly to snuff out small business owners. So when they don’t pay their invoices on the due date and delay payment for months on end it may not necessarily be because a senior manager has ordered accounts people not to pay. The senior manager may have told them not to pay so quickly but after time instruction becomes so lost that the general approach becomes one of delaying payments to suppliers.
One more thing: if you’ve worked in big firms, then you will know how slow some people can be. People who would not last one day in their own business are so removed from economic reality that it seems they don’t give a damn about anyone but themselves.
Successful entrepreneurs anticipate the 10% or 15% of customers who will pose special collection problems. They will establish a rigid collection follow-up system. They will be consistent and persistent in their follow-up. But not so aggressively as to destroy relationships. Public relations and selling remain important.
Yet they’d be absolute fools to send out new merchandise if invoices remain unpaid. If invoices for critical service and maintenance are not paid, customers need to be forewarned but they can’t get away with non-payment. Business rules need to be applied firmly.
Entrepreneurs don’t forget their sense of humour and natural curiosity. If you are curious, find out the one thing you must do if you run into a cash flow problem and your creditors hound you like dogs on a fox hunt. Fill in your email address below in confidence to find out more.