Engaging vendors and customers can be the secret to great opportunities in route to uncovering your fortune.
Let's follow the clues to uncover your buried treasure.
Ironically, fast growth could cause a problem to fulfill products or services immediately while payment takes months to arrive.
Vendors can be especially useful during periods when expenses remain high but invoices aren't due for months.
Pay vendors on time (when possible) so the conversation is easier if you have to ask for additional time to pay when times are tight.
Vendors can help in other ways, such as no-interest payment terms and accepting prepayments (useful for cash-based companies).
𝘼𝙨𝙠 𝙛𝙤𝙧 𝙗𝙚𝙩𝙩𝙚𝙧 𝙥𝙖𝙮𝙢𝙚𝙣𝙩 𝙩𝙚𝙧𝙢𝙨 𝙗𝙚𝙛𝙤𝙧𝙚 𝙮𝙤𝙪 𝙣𝙚𝙚𝙙 𝙩𝙝𝙚𝙢.
Reach out every 6-12 months to discuss credit terms and pricing, especially if you see a lot more business heading their way.
Communicate your strategy, plans, and achievements early and ask for their input on any challenges to foster a collaborative partnership.
Other ways to establish a strong working relationship:
Testimonials. Assist vendors in reaching more startups or companies in your industry by touting your positive experience.
Referrals. Introduce them to potential new customers. Also, offer them a gift or fee if they refer business to you.
Partners. Introduce vendors on big deals. With a potential huge customer, this shows your ability and commitment.
Barter. Trade your services to help solve their business issues in lieu of cash.
Equity. Offer equity for payment to align your success with them.
Vendors with a solid connection to your company are rooting for your success in the hope that they will get more business, too.
Occasionally, some customers are so excited about your vision that they will invest as a strategic opportunity. However, more often you can leverage your customer relationships into better cash flow.
The best case is getting paid before you have to lay out any money for production and overhead. For instance, this happens when a client is so excited about your roadmap that they pay for the product before its completion.
Other ways to improve cashflow:
Increase prices (e.g. sell a premium feature or deliver faster service)
Shorten payment terms
Offer discounts for pre-payments or deposits
Build a subscription model
Improve your collections process
Before these steps, make sure you are giving customers a significant competitive advantage, leveraging value into the discussion.
When you understand the benefits to both sides and search for ways to align your success with theirs, vendors and customers will be eager to help you reach buried treasure.
Howard Pyle illustration of pirates burying Captain Kidd's treasure, from his 𝐵𝑜𝑜𝑘 𝑜𝑓 𝑃𝑖𝑟𝑎𝑡𝑒𝑠. More about Howard Pyle can be found here: https://bit.ly/3Cbdq2Y