#2-How Entrepreneurs Are Surviving The Financial Crisis
Entrepreneurial skills are good ones to have, especially during a slow economy. This series focuses on the top survival tips from successful entrepreneurs on getting through the crisis.
In this post we feature Susan Matthews Apgood President & Co-Founder, News Generation (www.NewsGeneration.com). News Generation is the top radio PR company in the nation. Susan took several, key steps during recent months:
“In terms of financial work I have done in anticipation of potential issues, I have done a few things differently in the last six months to a year. First, I have become much stricter on collections, especially with clients that don’t have a great payment history. I used to wait until invoices were 45-days old before following up with clients to make sure payments are on the way. Now, I call about five to seven business days after the invoice goes out to make sure it was received and is set for payment. Even though we are just as busy as we used to be, I just have placed a different priority on collections than in the past. I have found that has gotten payments made more quickly, so I will probably keep it up even after the economy rebounds. Second, I don’t start work with new clients until I have a 50% deposit in hand — the credit card has to go through or the check cashed. I sometimes used to be OK with receiving check numbers and would start projects when checks were en route. After getting lied to a few times, it did not take me long to update that policy. If clients balk at our policy, then I ususally know the client will be bad news down the line whether paying their final balance or during the project process itself. Third, last year, when there was talk of a recession coming, I put as much money as I possibly could into our money market account and plan not to use it unless absolutely necessary. And as a back up plan to that, I secured a line of credit that would keep us afloat for four to five months of basic cash flow. I plan to never use it, but it is nice to know the cushion is there if all other options are exhausted.”
1. Financial literacy. Have students teview the financial exercises in Module 3 in the free EITC curriculum. Match the financial terms mentioned by Susan, above, to the financial statements showcased in the curriculum.
Extra: Look up the terms NOT discussed in the EITC curriculum by Googling them.
2. Consider, also, the EITC “yard sale” alternative exercise to showcase basic points about financial management in our everyday lives.
Extra: Interview a local store owner/manager or entrepreneur about their payment policies. Ask them to explain the rationale for those policies and report your top three takeaways.
Stay tuned for the next in our series around How Entrepreneurs are Surviving the Financial Crisis.
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