Courtesy counters cash-flow ‘kryptonite’
In the business world, there is a saying that is so true that every businessperson or hopeful entrepreneur should run their company with it in mind: “A lack of cash flow is like kryptonite, it kills superheroes!”
Early in my career, my wife and I decided to bootstrap our restaurant company. We only used our personal financial resources, i.e. savings, which we depleted. We cashed out both of our 401(k) retirement accounts and maxed out all of our personal credit cards and home equity lines of credit, with no outside business partners or investors.
As with any new business, it took us a long time to get traction in the marketplace. During that time, it was extremely important for us to be really cautious as to where to spend the money we were bringing in from business operations, as cash flow was extremely tight. During that time, I got the call any business owner would dread, one of the toughest conversations you can have as an entrepreneur who has all of their savings and assets on the line. When I picked up my cellphone, it was the largest financial institution I was dealing with at the time. They wanted to informed me that they will no longer offer me the line of credit and I had 90 days to repay the entire debt. They called the loan!
This is the kind of stuff they do not teach you in business school. As a 29-year-old at the time, I was getting a street university doctorate in business troubleshooting. We were using 80% of the line of credit, and were dependent on the available 20% to run the daily operations of the business, since cash flow was not enough to maintain operations. After many phone calls to the bank, many sleepless nights and refusing to take no for an answer, I eventually got someone at the bank to approve an extension. That gave us enough time to eventually refinance the loan.
It was during those really tough times I grew the most as a business person. It gave me a new perspective on how to focus on growing our business organically, by acquiring more happy customers who would vouch for us and our products, thus gaining more and more traction in the marketplace.
As a business owner, it is your primary responsibility to serve your customers to the best of your ability and make sure your team/employees have a good notion of what it takes to provide consistent great service. As simple as it sounds, it will be one of the hardest things to maintain when running a business, but once you figure that one out, you will notice your cash flow problems will magically start to disappear.
As you develop your business and grow it, I highly recommend to always make every decision with the customer in mind. I like to remind our team members that their paycheck is brought to them by our customers, and without our customers we have no business. Learning how to deliver consistent good service is a must for any company that wants to stay relevant in the marketplace. Being courte
ous and kind to people — both employees and customers — can take your business to a new level, especially when it comes to cash flow and increasing revenues. Yes, just by being kind and courteous to people, more customers will come back to support your business.
Being an entrepreneur and being able to navigate through difficult cash flow situations is a learned skill, and in my humble opinion can only be mastered through real-life experiences and a lot of practice. I have not met anyone who was born as a natural entrepreneur with all the skills to successfully start and operate a business. From the very beginning, the most successful ones I have met had their share of obstacles and difficulties. The only differences between them and the numerous people who started a business and could not make it is that they were resourceful and had enough grit to make it happen. Plus, they are super determined to add lots of value to their customers. If they can do it, so can you!