“The U.S. Treasury announced that in 2009 it will cease printing $20 bills in favor of a new $30 bill that is expected to help boost the economy. Experts agree that the additional $10 will stay within the economic cash cycle. Opponents believe this will cause a drop in the market and stall foreseeable growth. The announcement has economists and the feds wondering if pocket change is still viable.”
Wow! Can you imagine reading that over a morning cup of coffee? I suspect that article would remain in your thoughts, as a business owner, for a great deal of the day. How is this news going to affect my business? What happens to my cash flow? I’d bet anything that just reading the opening paragraph had you considering the possibilities, and hopefully the opportunities, that such an event could bring.
A lot of what happens in everyday life is the outcome of the day before. Life gets so busy that we sometimes forget, or aren’t willing to change, the course we’re going. Once in the flow it seems easier to remain there than to alter course.
People will acknowledge the rut they are in, but not necessarily change it—there is a comfort level in just “going with the flow.” At some point, any decision to steer out of the flow changes the course for uncharted waters. With that comes a lot of questions, sometimes with few answers, and a lot of responsibilities with only one person to blame.
It has been said that a sole proprietor makes more decisions throughout the workday then a CEO of a major company. Think about that for a moment to realize just how many decisions you make in a day. Kind of eye-opening, huh? Making so many decisions comes with a price— it costs your “flow.”
Customers asking to catch you next week or always asking you to lower the weekly payment amounts is all part of the flow, the current that is continually pulling at you. You may not have jumped in intentionally, but maybe after a long day or a week of things just not going right you let your guard down. Splash—there you were just going with the flow. For a while things seemed a little easier and more enjoyable throughout the day, but in the back of your mind there was a voice that understood what was happening: that slowly the captain was being overtaken.
Changing anything seems detrimental to business; sometimes not wanting to make waves puts the head decision maker at the mercy of the flow. Over time, some of those hard and fast rules that you started with begin to erode. Since you assumed the position of head decision maker (don’t forget treasurer), changing and maintaining a healthy cash flow in your business is solely dependent upon you.
On average, the $20 bill is the most common one pulled from our customers’ pockets. We all have customers that run higher account balances and pay accordingly—but what about the average tech with too high a balance and too low of a payment? Somewhere there was a disconnect in the amount owed and amount being paid. We all want to be the tool guy that the techs look to when they need product, but at what price does this come?
Over the years I have had several conversations with customers regarding weekly payments I expect vs. what the other guy requires on the same amount. Is the desire to be the tool guy clouding good judgment? Every account allowed to stretch thin payment-wise for the sake of the sale generally is the one that puts us at the greatest risk. Allowing customers to run up their accounts without setting proper terms, and holding them to those terms, is setting an unhealthy precedent for a problem that will grow if not corrected. That precedent has the power to slowly take down a healthy business and infect the entire mobile sales world.
Changing the payment expected as little as $5 per customer would do what to your bottom line at the end of the week? What about $10 per customer? A quick run of the numbers will show that such a subtle adjustment makes a huge difference in a week, a month, a year—all without adding any new customers. The money required to boost your cash cycle is already available on your route, it’s up to you on how or whether it gets collected!
Joe Poulin is a mobile tool distributor based in Gray, Maine, for Mac Tools. Send any comments or feedback you have for Joe by email to firstname.lastname@example.org.