“Not paying your bills on time” means using your vendors and landlords as a reliable source of interest-free cash, by consciously stretching out your payments in an orderly manner. It involves having real and honest vendor negotiations, and setting realistic payment terms, giving you the opportunity to increase your cash-on-hand, and avoid the struggle of running your business just to pay vendors. Several years ago, we were working with a plumbing contractor who had become enslaved to their vendors. In my experience, if you’re cash poor, you should force vendors to work with you more, and if you’re cash rich, force them to give you more! By “Not paying your vendors,” you’re positioning your business to have the financial resources to not only grow, but also achieve cash-stability.

Source: Forbes April 05, 2017 21:33 UTC