If you’ve never been on the other side of a payroll cycle, let me share with you how it feels and the thoughts that goes through the mind of an entrepreneur who has got paychecks to issue at the start of every month!
Yes! Its the time of the month! When I was on a payroll, this day seemed to be coming so slowly! But now that I’m the one doing the payroll, this day seems to be coming too fast too quickly! Just when you think you’d issued the previous payroll, the next one is here again! Why didn’t I feel that days were passing so quickly when I’m waiting for my paycheck in the past?
Its scary to see the stream going in just one direction. No income but with monthly recurring expenses. The paychecks, the rental and the monthly necessities! I’m very used to looking at my own bank account going red, but for a company, this is a 101% NO! NO! So how can one ensure that the numbers never go red in the book?
Few tips from this panda entrepreneur…
- Ensure sufficient cash in bank. The amount should at least meet the basic expenses for the next six months.
- Remember to send out your invoices in time! No business partners nor clients will remind you for this one. So if you are doing all your invoicing too, make sure they go out on time. Chase for payment if you have to. In business world, there’s nothing as “shy”.
- Make friends with your suppliers and vendors. If possible, the best scenario is to get supply/ job done first and pay later or better still, pay them only when your client pays you. Only very good friends/partners will allow this. So be nice and build that relationship.
- Treat your team like your family. When times are tight, they will understand when the pay check comes in late. Treating them like family also makes working more fun and motivating.
Now… back to crunching those numbers in the accounts.