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Just pay it off. What happens when the next client doesn't pay? Are you going to add that on top of the current debt to cover your costs until he or she can pay?
Just pay it off. What happens when the next client doesn't pay? Are you going to add that on top of the current debt to cover your costs until he or she can pay?
The situation that we were in was VERY unique and I can almost guarantee it wouldn't happen again.
The situation that we were in was VERY unique and I can almost guarantee it wouldn't happen again.
Having clients not paying when they said they would is in no sense unique.
Regardless, the way you handle your debt in business should be much more disciplined than the way you do it personally. On the personal level its simple, just pay off your card at the end of each month. But with business there are going to be times when you need to utilize the money over a period longer than one month. Its a lot easier to get in trouble when this is the case.
Having clients not paying when they said they would is in no sense unique.
Regardless, the way you handle your debt in business should be much more disciplined than the way you do it personally. On the personal level its simple, just pay off your card at the end of each month. But with business there are going to be times when you need to utilize the money over a period longer than one month. Its a lot easier to get in trouble when this is the case.
Do you really want me to bore you and go into details about the situation? I mean, I appreciate your concern, but just believe me when I say that it was unique and very unlikely to occur again.
PLUS it was coupled with the fact that we just started our business last year, so we had some extraneous start up costs. Now that we have fully collected, our cash reserves are MORE than enough.
Do you really want me to bore you and go into details about the situation? I mean, I appreciate your concern, but just believe me when I say that it was unique and very unlikely to occur again.
I'm not talking about the particular details of this situation, that is not the point at all. I'm talking about the general situation, which is a temporary cash flow problem. There are all sorts of reason this can occur and one way of dealing with it is with credit.
Quote:
Originally Posted by thepinksquid
Now that we have fully collected, our cash reserves are MORE than enough.
Until you actually try to grow out of your bedroom.
I'm not talking about the particular details of this situation, that is not the point at all. I'm talking about the general situation, which is a temporary cash flow problem. There are all sorts of reason this can occur and one way of dealing with it is with credit.
Just realize that one of the biggest catalysts for our temporary cash flow shortage was because we began our business in May of last year, and not so much the client situation we had. If we could have had a great influx of income in our first six months of being a business so negate our start-up costs, if would have been fantastic, of course. But we had a moderate amount--and we're lucky to be fully profitable right now, something most small businesses take years to get to. We're even now to the point of being away to "put away" income, which is fantastic.
Quote:
Originally Posted by user_id
Until you actually try to grow out of your bedroom.
Sorry...I'm a little lost...what do you mean by that?
and we're lucky to be fully profitable right now, something most small businesses take years to get to.
Luck has nothing to do with it, rather you started a business that requires few capital expenditures. The businesses that take years to become profitable are the ones that require large capital expenditures, not a few licenses, some chairs, desk, computer, spare bedroom, etc.
Also, it is only in the accounting sense that you have profit. If you divided the total hours spent by the income generated I'm sure the hourly wage would be pretty bad. This is of course a sacrifice many cash-strapped businesses take in the hopes of creating a business with actual value (i.e., one that generates a true profit).
Quote:
Originally Posted by thepinksquid
Sorry...I'm a little lost...what do you mean by that?
The point is that growing what you are doing now into a real business is going to take a lot of capital and you're also going to have to deal with numerous cash flow crises. These arise from a variety of circumstances.
Zero interest for a few more months makes me wonder why even consider paying the loan off until it was due.....If your money can earn you 5. 10. 20 or 100 dollars in the bank or whereever then you gain.....Good luck.
However, you can still give them the minimum monthly payment + your credit score will raise higher when you pay down the card to zero due.
...
Luck has nothing to do with it, rather you started a business that requires few capital expenditures. The businesses that take years to become profitable are the ones that require large capital expenditures, not a few licenses, some chairs, desk, computer, spare bedroom, etc.
Also, it is only in the accounting sense that you have profit. If you divided the total hours spent by the income generated I'm sure the hourly wage would be pretty bad. This is of course a sacrifice many cash-strapped businesses take in the hopes of creating a business with actual value (i.e., one that generates a true profit).
The point is that growing what you are doing now into a real business is going to take a lot of capital and you're also going to have to deal with numerous cash flow crises. These arise from a variety of circumstances.
I kind of used the term "lucky" as more of a manner of speech rather than saying what we have is due to luck, if that makes any sense.
This is all waaay beyond the scope of my original question, however, as far as wage per hour goes, yeah we would (at the point) make more money working for another company. However, we derive personal fulfillment from being self-employed and we feel as if what we do can very likely give us decent profit (at least for us) as we have several "niche" type things we work with.
Simply put, we enjoy our work and feel that for us the pros outweigh the cons of being self-employed.
All I was trying to ask was if the effect that waiting to pay off the balance would possibly have on my credit score. No offense, but I wasn't coming here for business advice...and if I was looking for advice...I don't think an online forum would be the first place I'd wish to go.
Last edited by thepinksquid; 03-28-2010 at 03:39 AM..
Simply put, we enjoy our work and feel that for us the pros outweigh the cons of being self-employed.
Spot on, Sqiddie. I wouldn't go back to working for "the man" for ANYTHING. I love my independence as an owner. There are down sides -- like in our business, vacations are a distant dream... but the upsides are FAR more plentiful.
And you also show good judgement for not coming to a online forum for business advice.
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