#1 Thing You Can Do Right Away to Change to Increase your Cash Flow

When I owned my agency I felt stressed out all the time about money and cash flow. We always had projects coming in, and on paper things looked great. In reality we had no money to invest back in the business and at times I was even worried about making payroll.

Change Your Payment Terms Right Now

You are probably following the typical agency payment terms of 50% up front and 50% upon completion. Stop it! How many of your projects are on hold waiting for client feedback? That means you’re not getting paid while you wait. How many projects fizzle out completely? You never get paid – that’s not cool.

What you should do is set up the payment terms I had at my agency. Your terms should be 50% at the start of the project, 25% midway through the project or on a specific date, whichever comes first. Then, 25% upon completion of the project or on a specific date, the sooner of the two.

There are two benefits to following this model.

First, you have a more reliable and predictable revenue stream. You can use a system to automatically invoice on particular dates or even automatically charge their credit card on payment due dates.

Second, if the client knows they’re paying you regardless of the project status, they will be more motivated to keep things moving.

To get this started immediately:

* 1st – Change the payment terms in your contract verbiage immediately and implement the new payment terms on every new project.

* 2nd – Educate your clients early-on so they are not blind-sided. Explain what you’re doing and why.

* 3rd – Stick to your guns! Stop working if you don’t get paid and put the project back in the  queue when you do.

So what are you waiting for? Go do it!