I have built up strong business relationships over the years and from time to time you will test those relationships. This years start has not been ideal with one of our payments delayed from our main client which has a knock on effect. Today is the 6th of the month and rent was only paid to the land lords today which was kind of expected even though I had penciled in yesterday being the 1st official day back for many businesses. Communication on my clients part would have been nice and not me chasing payments. Silence is sometimes seen as a good thing, but not when someone owes you money.
I had been putting pressure for payments since last week Thursday without much luck and had been slightly concerned. Yesterday I made some more calls and was assured payments would happen today even though I had pushed for payments yesterday. Lunch time today we received an email from the land lords questioning where was their payment and they were paid 30 minutes later with an apology stating today was our first day back. A white lie for sure, but having the payment made even though a day later than expected the relationship and trust remains intact. The worry was what if the payment was a few days or a week late and I would have to jump in and pay the rental myself which is not pocket change.
Last year there were some testing times with regard to payments including the land lords and when you have personally signed assurity which makes you the guarantor if payments are missed. This applies to all the other service providers which is why you have to make the business work and are always looking for growth which ultimately will remove the general risk of failure. Most businesses take a good 10 years to be considered established and with us only finishing our second year now we still have a way to go.
The expectation is that by June this year we will be financially secure as a business even if clients are late with payments. This will be able to remove the stresses of having enough in the bank to cover all bills and we are clearly not at that point yet. The constant worry of not relying on one or two clients for your business is always hanging over your head and why the need to diversify and grow is a must do. Cash flow is a major small business killer and this I need to get the balance right even if it means a small investment on my part. Up till now this has not been required and managed to get the business started on a shoe string budget.
Our main clients business grew by 35% this Festive season so maybe I am over thinking the financials yet I must for now. The business grew 35% so that means their outlay and risk also grew with those numbers. Being a day late for rent may not seem like a big deal yet I have been in positions last year where no funds were coming with everyone waiting in a chain for payments to happen. This is a scenario I want to avoid this year as this becomes very stressful. When you are not at the top of the food chain and are waiting in line with others waiting in line on you and others waiting in line on others things can get rather frantic and why relationships and trust is so important.
