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It's not that difficult to sell lots of jobs, do great work, earn tons of money, and still go broke in the pro AV business in Charlotte. Here's how. First, sell a big project to a client without doing a credit check or getting a portion of the total cost of the job upfront.

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Cash Flow

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Source: PRO AV Magazine
Publication date: March 1, 2005

By John McKeon

It's not that difficult to sell lots of jobs, do great work, earn tons of money, and still go broke in the pro AV business. Here's how. First, sell a big project to a client without doing a credit check or getting a portion of the total cost of the job upfront. Execute every change the client asks for along the way — don't wait on formalities like change orders. Order the major equipment immediately, and let it sit in your warehouse for 60 days waiting to be installed. Submit invoices at your leisure — just because the client processes bills on the 10th and 20th of the month is no reason to hurry to meet those dates. Be sure to submit a nice, vague invoice, too, so the client has to send it back, asking for more detail. Meanwhile, let your vendors wait: They know they'll get paid eventually, right? Don't follow up too aggressively on your account receivables because persistence might offend the client and deter new business. When you finally decide to act, or the client finally turns out to be a deadbeat, make sure you act just after your right to file a lien or make a claim on a performance bond has expired. No matter how much business you're doing, falling into traps like these will take you down the sure road to disaster.

Obviously, it's rare for any one company to make all of these missteps at the same time, but all too many make at least a few.

Click here to read full article from Pro AV Magazine