7 Cash Flow Mistakes Entrepreneurs Make

Expert advice on how to avoid the pitfalls that could cost your business money

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Too often, small businesses end up in a cash flow crunch because in management’s haste to grow revenues, they often forget to screen out potentially bad customers. Michelle Dunn, founder and president of Never Dunn Publishing, LLC, has over 20 years experience in credit and debt collection. In her new book, “The Guide to Getting Paid: Weed-out Bad Paying Customers, Collect on Past Due Balances, and Avoid Bad Debt,” she details some of the most common financial mistakes (and their solutions) entrepreneurs make.

“I tell every business owner, once a year you need to go through your accounts receivable and fire three to five of your customers–the people you’re spending a lot of time on the phone with listening to them explain to you why they have to pay late or why you should still ship their order even though they can’t send you any money,” she says. BE spoke with Dunn to learn more of those mistakes and how entrepreneurs can avoid them.

Mistake #1: Getting incomplete credit information at the time of the sale. “Some people will have someone fill out a credit application and the person might just put their name, address, and then just sign the bottom and they don’t fill in the reference portion they don’t put in their work information,” says Dunn. The danger there is that if their account becomes delinquent and the client has moved, the small business has no way of contacting that customer.

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  • Carletta Threatt

    I need advice on increasing my enrollment
    at my Childcare center. The enrollment is
    down so low, a very nice center and the staff
    is certified.

  • Carletta Threatt

    Help in Macon Ga, I do not want to close my doors,help please… I enjoy reading the Black Enterprise…

  • Sheri M Green

    Hi Carletta, have you completed a comparison of your services verses your competitors in the same area? Figuring out why people are choosing other childcare centers over yours is key. Maybe a survey of what people are looking for in childcare throughout your area would be helpful. Just a few thoughts.

    Sheri M. Green

  • Michelle Dunn

    Sheri gives good advice, offer something your competition is not offering to make yourself more attractive to customers. Enrollment for childcare may also be down because of the economy – more people are out of work so watching their own children. Some things you can do to increase your cash flow are offer discounts, change your terms of payment, accept all methods of payment, offer something no other child care center offers to make yourself stand out.

  • Mr Yao kouamé hervé

    Salue je nomme yao k hervé originaire de la cote d’ivoire (c’est en Afrique)demande financière aux personnes de bonnes foies pour crée une entreprise pour se prendre en charge je suis au +22544014546 ou m’écrire à toupetait@hotmail.fr

  • Jorge Estemac

    I have established a corporation in Latin America with hope of promoting Afro-American businesses in that area of the Americas where the African-Americans are left outside the mainstream of society. The Afro-Americans in the USA should look outside the confines of continental USA, other ethnic and racial groups from other continents are taking advantage of these developing countries. I looking for Afro-Americans investors to join me in my efforts to develop opportunities for blacks in the rest of the Americas, and make a profit doing so. Globalization is for all of us to take advantages of the open market. I am seeking partners, investors in these ventures in the rest of the Americas.