In this economy and as in every stage of your business, manage your cash closely.  Though, especially so as customers continue to tighten their belts, it will become much more important to manage what is coming in and what is going out the door.

I learned my lesson with my first job.  As a paper boy I would often hold off on collecting payments for half a year or more.  Obviously, this didn’t go over well when I tried to collect.  Who would have guessed that customers were a bit shocked at receiving a bill for $200 or more for their morning paper?  Honestly, I was…  Though it was a good learning experience.

A number of key approaches that work well for me:

1. Work with customers on payment terms; frequency of payment, amount of payment.
2. Pinging customers about payments doesn’t hurt either.  This is where it becomes a bit of an art form.  You don’t want to ping too often or too infrequently
3. Touch base often to ensure that they are getting the best value out of your service.  After all, a happy customer is a paying customer (most of the time)
4. Let your customers know about what is going on with the company and the product.  Keep them engaged
5. Don’t be afraid to bill your customers like I was at my first job.  If they aren’t going to renew or pay, trust me, it is better to know sooner rather than later

Lastly, be confident in your product and service.

This entry was posted on Friday, April 24th, 2009 at 10:48 am and is filed under Startups. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.