I often speak of:
SALES, CASH FLOW, and PROFITS.
Without all three, no business survives.
Today, I’ll tell a Cash Flow story.
There’s this lawyer, see, who is pretty busy and seems pretty successful. Anyway, he has a client whom he billed about $4,000. By standard business practice, the client would have at least thirty days to pay - and, frankly, when it comes to lawyers, a pretty high percentage of their collections stretch much longer than that.
The lawyer immediately starts hounding the client for payment, and when the client offers to pay half now and the other half in 35 days, the lawyer goes ballistic! Has this hissy-fit about how he’s not a bank, needs the money, and so forth. Even when the client offers to pay extra (an amount equivalent to almost 20% interest), the lawyer wants no part of it.
Final outcome? The client offers to pay-in-full that day – BUT, the lawyer has to take 25% off the bill and has to take a credit card for payment. So, rather than wait 35 days for the last $2,000, the lawyer gave up $1,100 of the $4,000 bill! That’s an annual rate of return to the client of 575%! No wonder it was my advice to take the deal, eh?
The lawyer either is a schmuck, or manages his cash flow so badly that he has to offer deals this bizarre.
So, who do you know – and professionals are prime candidates – who would like to pay me a small fee in order to save thousands of dollars every year – and have better Cash Flow?