In the days when David and I were growing the Arts Hub business and simultaneously doing a few consulting projects we had a few interesting moments when cashflow was super tight and the horizon going forward looked rather dim in terms of revenue.

It was in one of these times, and I think there were some external events that made things similarly tough for other businesses around us also, that our mentor and Arts Hub Chairman, Dr Terry Cutler gave us some structured advice on a tactic that we’d used in rather haphazard ways and always a little guiltily, in our consulting arm The Dramatic Group Pty Ltd.

When things were really tight in consulting we would sometimes negotiate with a client to do a bit more work for them on the same budget but to be paid early for it so that we could better cashflow expenses in the coming months. At these times it just seemed to make sense to give a bit more value to the client in exchange for an easing of pressure on our bank account.

We also learned that there are numerous clients who have fabulous and exciting projects that you want to be involved in, but part of your relationship with them is a dance whereby you get to do the project but you don’t get paid until a long, long way through it. David and I were burned a few times by clients who used their interesting projects to seduce us into an involvement, but the pressing need to feed our children made us a little more cautious and disciplined over time and we ended up on insisting on a sizeable deposit, usually 40 to 60% of the total project value to be banked before we would start on it. No deposit, no work.

Dr Cutler’s mantra at times when the revenue looked to be declining was ‘ think of ways to bring the money forward’. What he meant by this was very similar to what we’d individually negotiated with clients when times were tough and that was finding ways to give a little extra in order to get more money upfront. Read More→