Nobody likes to get bills. They seem unending and chew up your monthly income as fast as it comes in. It’s probably the scariest part of starting a new business. You begin to realize that the bills are due no matter whether you have the funds to pay them or not. Many businesses fold simply because they can’t pay their bills. Many that survive find they can’t expand without a big cash infusion that may cause them to lose control of their own company. Is there another way?
When you are new in business this is especially trying. You find yourself playing catchup almost immediately and it can take years before there’s anything left you could conceivably call “profits.” For us it took 10 years to really get ahead! Why? Because we were growing and everything we made went right back into growth. Sound familiar?
But we found something surprising about all those bills. We discovered that there were several vendors we had who depended on us for their own growth! They actually wanted us to make it so they could sell us more and send us even more bills!
Take another look at your vendors and suppliers. Who’s getting the most money out of you each month? If you succeed do they succeed? Shouldn’t you be strategic allies? How can you make them increase your credit and lengthen your terms so that you can better afford grow, and, in the process make them a lot of money? Answer: TRUST. That’s right, they have to trust you!
They have to believe that you will stick around when you get bigger and don’t need them anymore. They have to believe that you will pay your bills on time. They have to believe that you will notify them as far in advance as possible when you can’t – with a plan to bring your account current within 30 days. They also have to believe in you, your product, your management and your growth strategy.
What would make them believe in all this? How about quarterly meetings where you outline your progress, your challenges and your plans? How about long-term contracts? How about treating them like a real partner with updates and opportunities?
This isn’t going to happen overnight. It will require some seasoning, where, over time, your consistent behavior earns their trust! It took us years but eventually our supply companies, vendors and bankers all extended our credit and terms enabling us to reduce our need for capital and grow on our cash flow. Sure there were times when we were unable to perform, but because they believed we had their best interests at heart, they were lenient. They’d seen how we handled the same situation in the past. They judged us not by how well we paid when we were on time but by how fast we became current when we were late!
Maybe it’s time for a meeting with the vendors and suppliers who send you your largest bills. Find out what it would take to get them to extend your credit. Usually they will have a performance plan whereby you prove over time that you are worthy of more credit. Go ahead and prove it! It’s a whole lot cheaper than a loan, you stay in control of your company, you reduce the use of your interest-bearing line of credit, and you forge a long-term alliance with a supplier who has a special interest in your success. Yes, it’s sort of like what the pioneer said, “Thar’s gold in them thar bills!”
Who We Are.
Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.
Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.
They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.
Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.
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