by Jo Panzera, Director of Finance & Administration, Start Small Think Big
“If you want to succeed, you’re going to have to adjust your moral compass!” That was the advice a close entrepreneur friend of mine was given by a seasoned Silicon Valley tech entrepreneur as she tried to launch her own app to connect women around the world.
He went on to criticize her approach as being too soft, too ‘principled’, and cited examples of his own success – factors such as paying vendors late, or not at all, and simply moving on to a new vendor after defaulting on payments, thus preserving his own cashflow. I’ll emphasize again, this was a seasoned, highly successful, tech entrepreneur whom she had looked to for mentorship, who was advising her to climb her own ladder at the expense of others around her by adopting some pretty unscrupulous business practices.
Shocking as this may sound, these practices happen all too often, and it’s small businesses that suffer the most. As every small business owner can attest to, customers paying late, reneging on contracts or not paying bills can be devastating to cashflow.
The term ‘cash is king’ is somewhat inaccurate for a small business – a more appropriate expression might be ‘cash is oxygen’ – without a regular flow, businesses are stifled and come to a grinding halt.
JUST PAY IT
That’s why at Start Small Think Big, we process an invoice the moment it lands in our inbox, whether or not the payment terms are 15 days, 30 days or more. We personally set ourselves payment term goals of 24 hours to process an invoice and 4 days to have cash in a vendor’s bank account. As an organization that promotes and supports small business, it is part of our culture to do everything we can to facilitate success for entrepreneurs, and that includes scrutiny of our own internal policies. Sure, it would be easier to batch process invoices at the end of each month, but we’ve set ourselves up with a payment system that enables easy processing of invoices and ACH payment in under a minute. It would seem somewhat counterintuitive to our mission if we were reluctant to commit just one minute of our time to ease the cashflow burden for a vendor.
As customers, we absolutely should adjust our moral compass – but adjust it in the right direction. Point it towards compassion, understanding and respect for all business owners, and in doing so lift up entrepreneurs, create an environment of mutual success and perhaps set the bar a little higher for other businesses with regard to expected business ethics.
