My first business almost went under after 9/11. It was a time of grief and turmoil for everyone. Families were devastated. Entire industries came to a halt.

My business clients stopped paying their invoices, but I still had a team to support.

Three months in, I ran out of cash. I needed a line of credit, but no one was lending. The business barely survived.

Then came 2008.

Big clients ran out of money. I had $500K in receivables. Most I had to write off.

That’s when I finally learned:

When you invoice after completing the work, it’s like giving a free loan. And it might never be paid. Meanwhile you still have to pay your team, your overhead, and your expenses.

I decided to flip the script.

1. We started with monthly retainers and deducting hours from the balance.

It improved cashflow.
But was still tedious.

2. Then we moved to a flat fee.

That was the game-changer.
The start of productized services.

To make sure we didn’t lose money, we had to:

– Simplify
– Constrain
– Systematize

Instead of having a very expensive team that was solving every imaginable problem for every type of client, we began to:

– Solve a specific problem
– For a specific type of customer
– In a systematic way

The results:

– Cashflow improved dramatically
– Hiring, training & sales were easier
– The value of my business increased

This strategy helps with more than numbers. It gives you both security and freedom.

The best time to strengthen your business is before you’re forced to.

If clients pay for your services after delivery, it’s like a banker giving a free loan. Bankers don’t do that. Maybe you shouldn’t either.