Page 169 - Paulisms: Gold Nuggets for Small Business

Another situation was where a young guy wanted to scale up but he couldn’t afford it in his cash flow to employ any more staff. He was going to hold off until his business was bigger. We needed resource – good resource. He was a good operator. I said, ‘We’ll pay you every 7 days, so that gives you the cash flow to do it.’ It was a win–win; he scaled up with the guaranteed cash flow and we got our capacity. After a while he also went to normal payment terms.
Both these young guys will do well in the future, as they took risks. We took a risk also, as it ate into our cash flow. It was a win–win and it built loyalty; I know that when I need a favour, they will be there for us.
Paulism: Build loyalty with tradespeople by paying them on time. Don’t be afraid to work with them to share the risk to both scale up and make more money for all parties.