Brian Cotter’s comment yesterday about collecting accounts receivable (Weigh Yourself Every Day For Business Success) reminded me of a critical principle I’ve learned in business:
Getting paid is the final objective.Â
It seems obvious but a lot of people don’t understand this. They think that the final objective is closing a sale or shipping a product. So that’s all they focus on.
They’re making a big mistake.
Getting paid is the final objective. You can close all the sales you want but if you don’t get paid none of those sales matter. In fact, you’re worse off than having made no sales because those sales cost you time and money.
It’s the same thing if you earn shares in a company as part of your compensation. Remember that your final objective is not earning the shares, but selling the shares and getting paid. If the company is public no problem — you can sell shares at any time. On the other hand, if the company is private it’s unlikely you’ll be able to sell your shares unless someone comes along and buys 100% of the company. And even then you’re not in control — the majority shareholder is making the selling decision, not you. There are a lot of hurdles before you can sell your shares. And if you can’t sell your shares you can’t get paid.
If you think a customer shows a high risk of not paying you, you should consider declining business from that customer unless you can get at least partial payment up front. Payment terms are often overlooked in contractual negotiations. Pay attention to them.
I want all my readers to get paid what is owed to them. Stay focused on getting paid as the final objective and you’ll win more.
