Anything is possible with perseverance (and peanut butter)
Near the end of the 2017, I read an interesting article by Microsoft’s Brad Smith, which was written as part of celebrating the completion of a 4,000-mile-long, sub-sea, communications cable between North America and Spain. The laying of this cable is an impressive achievement, as well as the fact that it can apparently transmit eight times the volume of information of the U.S. Library of Congress in one second!
But more impressive than the cable, were the implications of the history lesson provided throughout the rest of article. In the article, Brad Smith goes through the history of how the first sub-sea cables were laid, and the problems that were overcome. Not to belittle the 2017 team’s 5 months effort for the above cable, but attempting such a thing in 1850 would have been infinitely more difficult.
Sunken Costs
Not only had it not been done before, but many of the necessary technologies needed to attempt this first cable were not available. There was no combination material that was water, temperature and pressure resistance to cover the wires. Also, there was no way to measure the depth of the sea, or determine what was on the bottom that could snag the cable. And lastly, they didn’t have 632 jars of peanut butter like the team in 2017 had to make the trips more pleasurable.
What did happen though, was a lot of trial and error, and many less determined individuals (and cables) fell by the wayside. In addition, there were those who believed it “absurd” and “impossible” (adding nothing but negativity to the endeavour).
And then this all got me thinking…
Isn’t this the same environment that all entrepreneurs find themselves?
They have their vision and end goal in sight and strive towards it—no matter the obstacles. They have many naysayers along the way (including some banks that they need to get on-board), yet they remain focused and determined to get to their goal.
Those with perseverance are generally the successful ones, but even entrepreneurs that are determined and focused can make mistakes and run out of money. Cyrus Field lost a lot of money when one of his first cables snapped 335 miles out to sea. Luckily, he had some deep pockets—but wouldn’t it be great if some of the mistakes entrepreneurs make, were less costly? Or didn’t even happen?
Beware of the sharks
What early warnings could entrepreneurs use to prevent these costly mistakes? Well, most businesses fail due to cash flow, i.e. the ability to make payments using money collected from customers. Generally, the interest payment terms of their creditors (or the so-called “loan sharks”) are much larger than the favourable terms given to a business’s customers.
And so, if a business could collect more from customers (and quicker), and have better rates negotiated with creditors, the business will have a better chance of staying afloat. Luckily, we live in an age of data, and so getting early warnings on both of the above items is much easier than in 1850.
A quick search online can bring back a list of the best places for loans (with many reviews from others). And this early warning of hidden terms and getting better interest rates can make a massive difference to a business’s cash flow.
In addition, many reporting and analytics solutions (such as Sage Intelligence) now provide many easy-to-use reports that help manage customer and creditor payments, i.e. Aged Creditors and Aged Debtors reports, like you can see below:
These reports represent great ways of tracking who owes the business money, who the business owes money to, and how long that money has been outstanding for. Chasing these customers down and constantly reviewing creditor terms are then the next challenges for entrepreneurs.
These are not trivial tasks and require tenacity and perseverance. However, for most entrepreneurs, the reward of staying in business and realising their long-term vision is generally worth the effort. Just make sure you have supportive packages like Sage Intelligence (and peanut butter) to help you along the way.