Loading ...I remember as a college freshman I had an “Into to Business” class. This was a mass-attendance lecture class in an auditorium of maybe 400. It was a series of different instructors giving their perspectives as successful businessman. One was a bit unorthodox but brutally truthful about business operations.
“What do you do when you have a cash crunch and you cannot pay your bills? Income is maybe 60 to 90 days out and coming…. but in the mean time suppliers are clamoring to be paid on their 30 day billing cycle coming due now. Nobody believes the “Check is in the mail” line anymore, so this is what I did. I sent each supplier a payment check that was not signed. Of course they all called, and I apologized for my ‘new secretary’, and told them each to send the check back and I would sign it. That took some valuable time. When I had all the checks back, and signed them, I still could not make them good, so I sent Supplier A check to B, B to C, etc. and scrambled the return mail. After more delays, the suppliers call again telling me they got the wrong check. More apologies for my confused secretary, send the checks back and we will straighten this out. Wait for the checks all to return again, wait for funds to be deposited by this time, and finally send out the valid payments. This series of delaying tactics succeeded in smoothing over the cash crunch.”
We were all somewhat bemused by him admitting to this almost-shady deal, and impressed with his ingenuity.