Breaking Free from the “I Can't Pay You Until I've Been Paid” Mindset
Let’s be real, we’ve all been there as business owners. You’ve done the work, put in the time, delivered the service, and then—when the invoice is due—you hear, “I can’t pay you until I’ve been paid.” It’s frustrating, right? It leaves you overextended, financially strained, and wondering why this is happening so often. The reality is, this happens to far too many small business owners.
In my six years working with businesses across New Zealand, I’ve seen it all. Hard work, passion & creativity—it’s all there. But when it comes to getting paid, many business owners are caught in a risky cycle, offering their services on credit without solid payment processes in place. And that’s putting their whole business at risk.
The Cash Flow Crisis: A Silent Business Killer
Here’s the thing—no matter how good your product or service is, if your cash flow is a mess, your business will struggle. We’ve all been through the chaos of COVID-19, and now with the recession, things aren’t getting any easier. But here’s the kicker: Even when the market was booming, businesses were already having trouble getting paid on time. Now, the pressure’s on, and those old cracks are getting harder to ignore.
Too often, I see business owners hesitant to ask for upfront payments, or payment on completion. They’re worried about scaring clients away or seeming too demanding. But here’s the truth—this hesitation could hurt your business in the long run. Especially now, when the “buy now, pay later” mentality is creeping into how clients expect to pay for services.
The Domino Effect: How Late Payments Ripple Through Your Business
Let’s be honest: If your customers don’t pay you on time, it creates a chain reaction. You’re then left scrambling to pay your own bills, and it doesn’t take long before you’re stuck in a cash flow bottleneck that can choke your business. This is especially tough in industries like transportation, construction & trades. I’ve seen clients in these sectors who are asked to do urgent repairs, only to end up negotiating payment terms afterward—sometimes getting paid in dribs and drabs that don’t really cover costs fast enough.
When this happens once or twice, it’s manageable. But when it becomes a regular occurrence, it’s a real problem. Many business owners feel stuck—like they have to accept these terms, or the client will go to the next provider. But - it can change.
Changing the Game: Setting Clear Payment Expectations
So, how do we fix this? It all starts with getting comfortable talking about money. It’s not just about creating payment terms—it’s about being upfront and clear from the start. If you’ve done the work, you deserve to be paid. Simple as that.
Set expectations early: Make it clear how and when you expect to be paid, whether that’s in your contract, on your invoices, or during an up front conversation.
Don’t shy away from upfront payments: It’s not about being difficult; it’s about protecting your business. Upfront payments are standard in many industries, so why shouldn’t they be in yours? Consider more regular progress payments: For larger jobs, ask for payments along the way. This keeps your cash flow steady and protects you from the risk of non-payment.
Confidence and Communication Are Key
At the end of the day, this all comes down to confidence. You provide value, and you should feel empowered to ask for payment on time. Don’t let the fear of losing a client stop you from setting strong, clear payment expectations. In fact, having solid processes in place can actually build trust with your clients.
We’re all navigating a tough economic climate, but that doesn’t mean you have to accept cash flow problems as the norm. By taking control of your payment processes, you’ll not only ease the financial pressure but also set yourself up for long-term success.
So, let’s break the cycle of “I can’t pay you until I’ve been paid.” It’s time to build a culture where businesses like yours get paid on time, every time, and thrive because of it.