Don't Borrow Money, Just Don't Pay Your Bills

No money to pay your bills? Don't borrow money, just don't pay your bills.

You have to pay them at some point, but there are tactics to slow down money flowing out of your bank account.

But FIRST... here are some bills you need to pay on time:
Payroll.
Payroll.
Payroll.
Anything that puts you in breach of contract and puts your business, your home, or your health at risk.

Other than that, most bills can be postponed past the due date without dire consequences.

Look at bills that you owe large corporations, who are used to delays. Telephone, internet, utilities, insurance companies. You may be able to wait up to 60 days without consequences. Let them know when you'll be paying.

Suppliers: Make sure that you talk with them. Make payment arrangements. Don't surprise them. Make a partial payment. Many times your relationship is more important than delaying payment.

Mortgages and rent: Most have a no-penalty grace period. Use it when you need to.

Please, be careful with solo-entrepreneurs and...

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A True Story: Bill’s Cash Crunch

My first full-time consulting assignment was for an outdoor power equipment company, we’ll call it “Bill’s Four-Season Power”, in a rural area in western Virginia. It’s the type of place that sells gas powered lawn mowers, trimmers, and lawn tractors in the summer, then snow blowers, chain saws, and wood choppers in the winter. The store was well stocked with recognized brands and they had a lot of long-term customers including a couple of local fire departments. Four full-time repair people on staff in the service department made sure that the customers stayed happy; they could repair just about anything.

Sales were good, and they were well respected by their suppliers. They had incredible credit terms with their key manufacturers. The showroom was clean, brightly lit, and had a coffee machine so people could take their time and relax while talking to the staff about their power equipment needs.

So why was I there?

“Their cash was dangerously...

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