It’s good to have the spirit back for business. One indication that my spirit is up to go is wake up early. Well.. this morning i must wake up early to give dirty cloth to “bibi” and it’s a good sign, isn’t it? “Back to laptop”, as Tukul said. or in my term, back to PC.
Business is about cashflow. If you want to succeed in business, you need to see if there is any differences between in flow and out flow. If the differences is plus, it’s a good sign. But if it’s minus, maybe not the business that is bad… maybe you put the wrong strategy. Cashflow is just a matter of knowing the differences from time after time. My business tutor said this to me. He already have one good construction company in Jakarta.
In 10 critical cash flow rules, entrepreneur.com posted, there is some that I had experiences with. It’s related with how much your customer owe you. The amount of cash that your customer owe you is less money. In theory, you can’t buy thing if you don’t have money. Well, you can buy things with credit card.. But you must remember one thing before you decide to use credit card or borrow money, how can you repay that money? Simple? Not very simple in the real life. If you plan to use credit card to pay for stuff your customers want, is there any guarantee that your customers pay the money immediately after they receive the stuff? Or they pay you after the time limit of your credit is up and you must repay it with more and more interest.
But there’s good news in the last rules in those article,
“If all your customers pay you immediately when they buy from you, and you don’t buy things before you sell them, then relax. But if you sell to businesses, keep in mind that they usually don’t pay immediately.”
You just have to monitor three vital metrics: Collection days, Inventory turnover and Payment days.