I am not Visa, Mastercard or American Express. In this climate cash flow is king.

All my contracts state that my firm bills every 2 weeks- yes, every two weeks!

That way, the client becomes accustomed to paying every two weeks- similar to the cable bill, etc.

The reason- it’s psychological- each bill is small (because it is every two weeks) and the client does not react negatively. Also, if the client gets billed once a month, it can take you or your firm more than 15 to 45 days to paid.

Lastly, make sure that one client does not make up more than 50% of my business. That way, if one client is/or has paid late, then we can pay our fixed expenses too!

“I pay everything else—including my employees—and if there’s anything left, then I pay myself.” This is a common practice for entrepreneurs, but a bad habit. You are your company’s most important worker, so treat yourself accordingly. Pay yourself a regular paycheck—even when you don’t have the money.

“But how, if I don’t have the money?” you ask incredulously. Borrow it! Use your business line of credit to make sure you get paid, just like you would for your employees. Then have the discipline to repay the loan when the receivables come in.

Big benefits to this practice!
• You get much more insistent about getting paid on time.
• You go after work that will bring consistent cash flow. You’ll actually say “no” to slow-pay work.
• You pay closer attention to cash management, including controlling costs, so that you’ll have your paycheck covered.
• Getting regular paychecks will re-energize and motivate you.
• As a result of all this, your company will become more profitable, and you’ll make more money.

This is about an attitude shift on your part, and it is a crucial step on the path to becoming a “real business.”

First, clients and customers are not as fickle as you think. And that is a good thing, especially when you are trying to grow your market.

Clients tend to be loyal to their current vendors and suppliers. In fact, the more loyal they are toward their current relationships, the more value they are to your organization. Once they become your customer, they will be equally as loyal to you. If a client is willing to change suppliers easily, investigate carefully. What is their financial situation? Have they maxed out their credit with your competitor? Is their business sustainable or are they pushing for unrealistic pricing or credit concessions? A customer that signs up easily can just as rapidly disappear.

Second, if something goes wrong with your service, own up to it quickly and honestly, and then ASK the customer how they would like it rectified. Chances are, they will ask for far less than you would expect them to. If you make an offer first, you may give away far more than you need to, and the customer may end up less satisfied as a result, because by extension, you devalue your goods and services. (If you can give that away, what else can they get from you?)

Developing partnerships with your clients and customers is the best way for you to build long term profits. Keeping the two tips above in mind, will help you build profitable accounts.