Why Cash Is King
As a business person, would you rather receive or give a 0% loan? The answer to the question is obvious, but many young entrepreneurs end up giving 0% loans to their customers when they provide their product/service and get paid 30, 60, and sometimes even 90 days later.
Why Payment Terms Are Important
One of the most important lessons that I've learned as an entrepreneur is that cash is king. And, when I say cash, I'm not talking about revenue or profit. I'm talking about cash in hand. A difference in the payment terms you negotiate with customers and suppliers can make the difference between whether your business is in business or out of business.
Your cash is not only important for survival, but it's also important for making expenses necessary for growth and paying your bills on time so you can have good credit. Credit is extremely important because it is one of the major factors that determines whether your accepted for loans and what interest rate your given once your accepted. In fact, over 80% of small businesses depend on credit.
How to Get Good Payment Terms
- Realize that Payment Terms are Negotiable. Although there are different standards for different industries, you should always try to get paid as quickly as possible, preferably before you even deliver your product/service.
- Follow Up. You'd be surprised at how many checks get lost in accounting departments because one piece of information is missing. You'd also be surprised at how many people forget to submit or process your paperwork.
- Keep Good Records. When you're starting a business, you will have a million things on your mind. Proceed at your own peril, if you think you can send an invoice to a customer and then just forget about it.
- Know the Potential Payment Terms.The most popular payment terms are:
- Pre-ordering (before a product is available for sale)
- Upon signing of the contract
- Upon satisfactorily completing project milestones
- Upon full delivery of the product/service
- Upon purchase of the product/service
- Net 30
- Net 60
- Net 90
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January 12, 2006
Top Awards & Grants for Young Entrepreneurs
Bank of America Youth Entrepreneur Awards: The Bank of America Youth Entrepreneur Awards rewards and nurtures local, NYC youth-run businesses and nonprofits by providing grants, technical assistance, and publicity.
Global Student Entrepreneur of the Year Awards: The Global Student Entrepreneur Awards recognize those outstanding undergraduate student entrepreneurs who are simultaneously juggling course work and cash flows - and succeeding at both!
Youth Venture: Youth Venture provides $1,000 grants and technical assistance to youth-led ventures, which provide a lasting benefit to their school and community.
The Brick Awards: Each year, the Do Something BRICK Award honors and provides $5,000-$10,000 grants to 6 outstanding leaders age 18 and under and 3 outstanding leaders age 19-25 who use their talents to take action that measurably strengthens their local communities in the areas of community building, health, or the environment.
Collegiate Business Plan Competition Circuit: This site gives the inside scoop on 21 of the most popular competitions nationwide.
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08:28 AM
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January 05, 2006
What the Statistics Say About You Succeeding as An Entrepreneur
Source: Redefining Business Success
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04:50 PM
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January 02, 2006
Have a Happy New Year
The New York Times has a great Op-Ed about Happiness called In Pursuit of Unhappiness. The article points to studies that show that self-reported happiness in Europe and the US has been stagnant since the 1950s when the study started.
I'm reading an interesting book called, Happiness: A History, which examines happiness in a Western context throughout history.
Hat Tip: Charlie
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06:12 PM
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What Should I Do With My Life?
What Should I Do with My Life? is the best book I've read in 2005. Po Bronson interviewed over 900 people, and narrowed these down into authentic, relatable, and inspiring stories.
If you're looking for positive, how-to advice this book isn't for you. Some of the stories end on a high note, while other don't. However, each has a powerful life lesson to learn.
