> until cash is in the bank I don't change my life.
if you're in sales, this is EXTREMELY important, doubly so if you sell for a startup. the deal isn't real until the money shows up.
customers will take advantage of your kindness, lie to you, manipulate you, appeal to your vanity, and they can smell desperation from a mile away. "give an inch and they'll take a mile" - these folksy old timey sayings don't come from nowhere.
there are all sorts of shitty people out there that will play napoleon for a day just because they feel they have power over you. it's sickening.
do not start work until you get the money. do not ship product until you get the money. do not pay your suppliers until you get the money. do not pay your sales people commission until you get the money - money didn't show up? well that wasn't a sale, now was it?
if they don't want to pay at LEAST a deposit, they're not serious. END OF STORY.
very simple in concept - very difficult in practice because there are some people who are just plain naive out there. one of the most important skills you learn as a startup is how to say no.
This is an important lesson, but it's not an absolute rule.
You need to have a sense for your customers, how much power they have over the money, and how much they'll suffer if you're inflexible.
I've spent years working with teachers, who (as patio11 will tell you) are not a great target market for ready cash, but who are very honest. I used to have an informal policy where a teacher would just tell me they were working on getting a purchase order, and I'd credit their subscription. I changed that to only crediting them a month at a time (after one situation where I realized towards the end of the year that one PO had never arrived.. it was stressful for the teacher, but all resolved amicably), but still, there's trust involved.
If I didn't trust them, a lot of these teachers would just be stuck without access for weeks -- the site would be far less useful to them.
- Edit: "until the cash is in the bank, don't change your life" still applies in my situation; payment was slow and unreliable (though paid in the long run), and that does affect planning.
In your case you have an established business, and you have a class of customers you understand and therefore who you can extend tailored win-win credit policies to. As you note in your edit, that's a different thing than the stuff that changes your life, like all that went in to establishing your companies up front.
if you're in sales, this is EXTREMELY important, doubly so if you sell for a startup. the deal isn't real until the money shows up.
customers will take advantage of your kindness, lie to you, manipulate you, appeal to your vanity, and they can smell desperation from a mile away. "give an inch and they'll take a mile" - these folksy old timey sayings don't come from nowhere.
there are all sorts of shitty people out there that will play napoleon for a day just because they feel they have power over you. it's sickening.
do not start work until you get the money. do not ship product until you get the money. do not pay your suppliers until you get the money. do not pay your sales people commission until you get the money - money didn't show up? well that wasn't a sale, now was it?
if they don't want to pay at LEAST a deposit, they're not serious. END OF STORY.
very simple in concept - very difficult in practice because there are some people who are just plain naive out there. one of the most important skills you learn as a startup is how to say no.