Small Business Question & Answer about Growing Pains
Growing Pains Q&A: Too Much Work, No Time to Market, Cash Flow, Losing Clients
Question: Cassandra, this is D. We spoke a few weeks ago about becoming a full blown property preservation company. My dilemma that I need some guidance on is that I have a real estate company that has really been giving me a lot of work, and last week I had a contractor to really slow me down from getting the job done on schedule. It’s causing the realtors to frown on that because they say that I’m causing them to get low grades on the properties, and that they will not be giving me bulk repair jobs anymore — maybe just one at a time.
I’ve been so busy with them the last 7 months that I haven’t really had time to market to others. Now that it looks like I may be losing this customer, or at least not getting as much work from them, I am wondering how do I go to asset management companies directly so that I can continue to get bulk orders without the middle man?
I feel like they are not looking at the fact that I have unpaid invoices from the bank that I’ve been working for through them, and it has hurt my cash flow. I’m just kinda hurt right now and need some direction on how to bounce back befor this thing goes south and I’m left looking stupid?
Answer Email #1: Hi D. I can feel your pain in the email. You are experiencing growing pains from a couple of sides. First, take a step back and look at where your money is coming from. And I mean the hard, cold cash, not the invoices outstanding… THAT paying client should be your first priority. I want you to close your eyes and look at who’s paying you FAST. Put them at the top of the list as far as work goes. Period. Complete those assignments so you get more money in … cash means you can hire help for the other jobs.
Now, for the client(s) NOT paying as fast. Let them know you’re swamped and cannot complete the work orders as quickly as they’d like b/c you want to get them done RIGHT. If they come back and say we can’t give you as much work b/c you are not completing work on time, let those work orders go. You can only do what you can do. Tell them you cannot take on anymore work from them right now unless the deadlines are changed. (I know; you don’t want to turn down work at this stage, but your reputation is far more important in the long run. Saying no will help you over time … you’ll see.)
For the client that’s paying slowly, back up a bit and collect on the current invoices due. Tell them you need them to settle invoices as fast as possible b/c you are a small company and want to bring in more trained help. If they are already late in paying, per you all’s initial terms, consider halting work until you get paid. We had a contractor keeping us as busy as bees, but ultimately we had to fight to get our monies — and this was a big company working for one of the top five banks. If you have a stack of invoices that have not been paid and are OUTSTANDING based on agreed upon terms, and that same company has you running around like a chicken with your head cut off doing the work, they will forever keep you busy, b/c you are working and waiting too long to get paid.
You can always factor your invoices… not sure if I sent you that link before but let me find it and I’ll send it over. This can help you with cash flow, too.
You hang in there and let me know how it goes … remember, just be honest with your clients. (For example, if you feel like you’re losing a good client — i.e., one that pays on time — for a job you didn’t quite meet expectations on, let that client know you are simply swamped with work, apologize and ask to be put back on their roster. Remind them of your previous work with them; let them know you are growing, training, etc.)
Stay tuned for other link… hang in there and stay in touch so I know how you’re doing! Cassandra
Answer Email #2: Hi again. You may want to consider factoring your invoices. Here are a couple of editorials on the subject. [See Related Articles below.]
Remember, keep in touch. (And you know what, you’ll be fine … you’ve got the stuff true entrepreneurs are made of … I can sense that in your email.) Cassandra
Look for more small business Questions & Answers like the ones above in future issues. See related posts below from the Jobs Blog
Cassandra Black is a foreclosure cleaning business consultant and small business author. She has written several books, reports and forms about entrepreneurship and the foreclosure cleanup
industry. She is also the author of a children’s picture book about entrepreneurship entitled, When I’m Big & Grown
. Cassandra’s next book, How to Start & Finance a Small Business While Collecting Unemployment
, will be available on Amazon and Barnes & Noble (new release date TBD).