Here are other ways in which you can become savvier and make your money go further.
Collaborate with peers and competitors alike
So you’ve tendered for a big contract but do not have the funds to commence work, your loan application is still pending and you’re strapped for cash. Consider collaborating with a like-minded industry peer of competitor who has the financial and operational resources to get the ball rolling. This sharing of the workload will mean sharing profits too which isn’t ideal however it proves your clients that you are capable, creates the right impression and increases your chances of being awarded future tenders too.
Engage with suppliers
Just like fostering positive relations with your peers is good for your business, so is doing the same with your suppliers. Play open cards with them and explain your financial situation so that they are open to longer term payment agreements. Standard payment terms are 30 days, you should negotiate for 90 days or more as this will frees up your cash flow to meet immediate payment needs and gives you time to accumulate more money. Having a good credit record with suppliers is essential when considering this option especially if your business nature is dependent on contact and ethics.
Negotiate with clients
If a client as deemed you capable of achieving their objectives in awarding you a contract, it means they have confidence in your business. Build on this trust by displaying business savviness through negotiating realistic payment terms. As a starting point, a deposit can be provided by the client to as a commitment to proceed with the contract. You can also negotiate for progress payment at strategic project milestones, this holds you accountable to completing the tasks within the required time frames and provides you with the cash flow needed to proceed with the work. Don’t shy away from these tactics in fear of losing the contract, driving these negotiations will result in a win-win for both you and the client.