Tiger By The Tail Tool
Secret 89: Closest To The Money
Start each day with payment. Ask, “Where can we collect cash? Where can we process a credit card, or pick up a check? Which clients on our accounts receivable list can we call to organize a payment today?”
The bull’s-eye of the Closest to the Money target is anything you can do today to actually get a payment and put money into your bank account. People have asked me, “Is getting in the car and driving across town to pick up a check the best use of my time?” In short, yes. Collecting payments is the lifeblood and the most valuable action of your business. It should be part of your company culture. Would I drive across town for $5? Most likely not, it isn’t worth my time, or yours. But I’d get a credit card number over the phone and process that $5 today.
Once I’ve looked at all the sources of immediate payment, I go to the next circle in my Closest to the Money target, which is paper. Where can I write a contract? Where can I generate an invoice? Who needs a quote? These are the paper items that will result in payments in the coming days and weeks. Most salespeople have prospective customers they have emailed an agreement for signature, but it hasn’t been completed.
Get them on the phone or drive over, go through the agreement and get it signed now! Go through your orders and client base, decide who to send an invoice for services, product, work in progress, or a deposit. By focusing on paper items now, you are looking ahead to next week’s cash, and this should drive the urgency for you and your team.
Once these first two levels of payment and paper have been executed, I look to the next circle, which is people. Who are the people you can connect with to do business today? This could be sales meetings, new prospecting meetings, networking functions, or supplier meetings. It is any in-person meeting or phone call that can result in potentially doing business today or in the near future.
It is not emails. Only live conversation truly moves business forward. An email is too easy to ignore or misplace in the vast sea of emails, and too hard to evaluate: “I think they liked it and might sign,” means you aren’t really sure and aren’t in control.
Finally, I look at the fourth circle in the Closest to the Money target: process. What process do we need to change or improve to generate more cash? This is the last place of focus because changing a process takes time, and the results are usually delayed.
For example, marketing is a process. Even if you start fleshing out a campaign idea today, it can take weeks to create the materials and ads. Then you need to test the results and potentially tweak and change your campaign. Months from now, it might be starting to work and generating leads.
Changes to your sales process also takes time to generate measurable results. It is worth doing, just not the first place to start. The same holds true for reviewing inventory levels and your process for managing inventory. Changes related to customer experience are also changes in process, and can be worth the time and consideration, but are not the place to start. Changes in process can potentially free up cash in the future, but not as fast as selling something today or collecting payments.
Businesses demand cash to fund their growth. Therefore start each day looking at the Closest to the Money target of payments, paper, people, and then process. Use this tiered structure as a guide for where to focus your team’s attention for steady cash flow.