As an expat entrepreneur, paying and collecting is a multinational affair. My business and personal life have footprints in three countries (NL, UK, US), so there are six payment pathways that have to be maintained, along with strict separation of business and personal flows (above from a lecture I give on organizing expat businesses). The complexity is a result of trying to collect and pay locally, minimizing cross-border currency flows to avoid bank and exchange charges.
So, at the first of every month, revenue and earnings have to be redistributed through the accounts in order to pay the bills:
- Check current balances and pending charges on each account.
- Reconcile and forecast upcoming demands on each account. Rent, taxes.and utilities are fairly constant, but Visa charges are always a surprise. ABN has no on-line account access and always deduct in full, so I have to leave a cushion for it.
- Flush money through the accounts with minimum international transfers: even SEPA charges ~30 euro overhead per transfer.
- Pay all rents and bills. I never carry more than 10% of your monthly income as monthly debt, and generally pay off everyone.
- Update the business records and ledger book, then transfer receipts and instructions to my bookkeeper and accountant.
It takes about half a day each month, but I just accept the overhead. I’m not as good at dogging receivables as I am doing diligence on payables, so stabilizing, collecting, and enhancing revenue is probably my biggest challenge (opportunity for improvement).
Fortunately, the jobs are increasingly there and the flux of deal flows is increasing, but monetizing that environment and invoicing aggressively remains a job in itself. It’s a bit discouraging sometimes because it all still feels hand to mouth: there is about 10% excess each month which doesn’t leave a lot for rainy days, dinners out, or vacation.
That said, I do like building the new business: chasing cool idea, working with great people, having strategic and business control, keeping what I win. But, early on, it’s also a lean existence, and it can feel acute in two ways.
A lot of work that I put into the business doesn’t come back to me as cash. It goes into “sweat equity” to build assets an networks, paid into loans and expenses that come back as stock or tax credits, ploughed into new clients that can flip to paying customers. It makes me much more conscious of costs, and whether they are investment or expenses, of how I productively spend my time and resources, and about creating value for myself and others with the things I do.
I rub elbows with a lot of successful folks in the course of fundraising and contracting, and do get hungry for the same opportunities and accessories that success has brought them. I know that they worked hard for what they have: finding good ideas, years of diligent execution, finally closing a lucrative exit. It reminds me to take small rewards, to play for the long game, and the importance of giving back some day.
I’m reading All the Devils Are Here, a wonderful history of the financial crisis and the events and personalities that created it. I’m struck by the envy and resentment that permeates the Money Culture, the animosity and jealousy between have’s and have-not’s in competitive organizations.
It feels more characteristic of what I experienced in corporate life than of how my entrepreneurial life plays out now. My relationships with suppliers, partners, and investors are synergistic and supportive: I respect their skills and resources and value the contributions that they are making to my efforts. It’s not so competitive and I can’t imagine taking advantage of them the way characters in the book would.
Then there’s the issue of rewards. You may think I have a list that includes a blue Porsche and a Tuscan Villa. Sorry, my rueful list contains the things that are wearing out in life and that need to be replaced when, at the end of some month, I have a couple of thousand euros. Things like a watch to replace the one lost racing through Security at Schiphol last year, a new suit without the frayed collar that I currently sport, a smartphone to replace my falling-apart Nokia…