Ateneo Professor on Entrepreneurship
Video from Entrepreneur.com featuring Michael Michalowicz, author of toilet paper entrepreneur on how to manage credit for start -ups.
Many business have fallen on the wayside or have closed shop because of credit mismagement. (My daughter stopped her beauty product business because of big accounts that bounced their check or did not pay her)
Some guidelines:
l. In the beginning, do not offer sales on credit; it is a that time you even need downpayment to finance your business;
2. If you must offer low price, be sure you are paid in cash; you may lose a customer; but never lose the only resource you have - your limited credit;
3. If you have healthy cash flow, offer credit but in very small amounts and build up the credit over a long period of time if and only if you know your customer very well. Impose penalties on late payors.
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