Get Paid! Essential Strategies for Assessing Customer Credit

Hello and welcome. My name is Tavishima Aide. I solve sales and marketing challenges and I'm making today's recording at an undisclosed location in Abuja. But yes, I'm in a car park, so expect to hear some interruptions in the background. Now, the goal of this podcast is business education. So please spread the word so that your friends and family members in Nigeria and abroad can benefit from the questions that we tackle.

They can do that by subscribing on Spotify, YouTube, Apple, or any player of their choice. And if you'd love to connect with me, you can call SMS or WhatsApp me on 08064662140. Today on the podcast, we're going to be looking at another listener question. It's been a while now. This one is from Mr. Andrew from NASA and we're going to be looking at how to determine credit worthy customers. And the reason why is because Mr. Andrew from Nasrara has issues with her customer debt.

Oh, by the way, thanks to Josh, I believe, who sent in some, he made a comment on one of the podcast episodes about how his English teacher taught him how to pronounce death and debt. So it's going to come into, it's going to come in handy today. So hopefully I'm pronouncing the words correctly. So DEBT, debt, customer debt. So Mr. Andrew, now he has issues with customer debt because he has given credit to some guys and, you know, people shout out owing him money.

And this is something that happens to some of us, you know, at one time or another when we get into business, you know, somebody says, and you know what, let me just drop 80% now, I'll give you the balance next month. Or another person will say, you know, maybe the amount on the invoice is 123,000 and then they transfer 100,000 and they say I'll sort you out that 23 K, I'll pay you next week. So whether it is that we're actually giving people money as in, you know, let me borrow you money, pay me back next month,

or whether we allow people to pay a deposit and then the balance is owed, you know, next month or in two months or whatever. Lots of us are giving out credit to customers. But a lot of us do not have the conversation ahead of time who is a credit worthy customer Because it's not everybody that you should allow to drop 80% and then, you know, bring the balance later or the invoice is 120 K and it's OK, you know what, let me drop 100 now the 23, I'll search you later.

You know, not everybody is, is everybody that you should give credit to. So that's what we're going to look at now. How do we determine creditworthy customers? Because this is a real live issue. In fact, I know that there's somebody listening to this podcast right now. Right now, I'm sure there's somebody like, you know, 250K is still outside. You haven't collected because you gave credit to one or two people. Now the first time Mr. Andrew asked this question, we discussed BNPL, that is buy now,

pay Later because they are BNPL service providers in Niger right now, buy now, pay later that allow you to pass along the business risk. And I think we'll try and shed some more light on that. So basically with buy now, pay later people, your product is there. There's one site I found in Lagos, you put their product on their site and basically what happens is that, you know, you get your money, I think you get it at a discounted rate.

So with that way there is some gap in between so that the company when they finish collecting their money in full from the person who is supposed to pay you, you know there's some profit on top for them. So I think that's how these buy now, pay later companies work. But basically it's one of it's a way to de risk by yourself de risk at this whole thing of of credit. And in fact, when I answered this question on the radio show,

there were people who called in to testify because even in Abuja, I've seen some companies like that because I went in to look at some brand new tablets because I'm currently, I do all my work from my phone and I'm using the Xiaomi 13 CI, think it's like a 6.7 something inches screen. I mean, it's alright, but The thing is I'm not as young as I used to be, so my eyesight is failing me. So I think now I need something that's like 8 inches, 10 inches.

Eventually I'm going to get one of those foldable screens, especially the ones that folds into 3 so I can just, you know, fold it down and use as a phone and then open it up. And then The thing is like a 10 inch iPad or something like that. So I went there now and I saw something that looked sweet. It looked very, very sweet. Then I said, sister, how much is this there? And then she said 300 and something KS. So OK, I'll put the thing down.

And I was about to leave. She said, oh, don't worry, we have services where you can put a deposit now and take the deposit and then pay the balance over XYZ months. I said, are you serious? She said yeah. Then she gave me a flyer with the name of the company there. So I'll be in touch with the company. So the scope is if I called the company and you know, the company was like, OK, you sound like a Courier guy. I want with their processes.

I will now take the tablet. I don't know how much I'll have to drop, but then I have to pay the balance over time. So I thought somebody called into the radio show and president boss, you know what you're saying is true. The same thing happened to me. But then this is the scope, this is the security. Because me, I'm always wondering, I was wondering, so I'll just take this tab to work out like this, like how you how you make sure I pay this money?

So the guy said what they do is there's a way that they lock the device. So let's say it's the 15th of every month or whatever of every month, your payment doesn't come through, the device will just seize. The thing will just lock. You can't do anything again until you make payment. Then the device will now open. I was like, OK, OK, I see. Makes sense now. So you can see that there's some companies in Niger who are making this their business model.

Now, as you want to sell your market, no problem, we'll help you sell your market. You want to give people credit? No problem. You can be giving people credit. We are the ones who will determine, you know who will determine, as one of my teachers used to say, secondary school guy usually determine, say determine. So what ones? I will determine how you get your money back, you know, very quickly. So yeah, these companies are out there.

So buy now pay letter companies. But what did the guy call it? I can't remember the name. It's like in Lagos, in Abuja, they really have one kind nickname like that. So these services do exist. Then I wanted to look at some other options for deciding who to give credit to. And unfortunately, we're going to look at some big boy, big girl options because there are lots of also listening to this podcast now, who are SMEs?

There are some of you who have, you know, 3000 products, you know, products you're selling 355000, you know, 75. So when everybody's an Adoco and everybody has arrived yet, so some of these options might not be available to you, but still I'm going to run through them because I know that the people who listen to this thing span the gamut. I mean, because I know podcast listeners who are doing, you know, like that kind 10 million monthly.

And I know some people who are just celebrating like they have finally hit 100K per month and they've done that for the last 3-4 months and they're celebrating. So between 100K and 1M. So between 100K and 10M, you know, we're all here, we're all listening, we can all learn. So one of those is credit bureaus. I made a podcast on credit bureaus a long time ago, so I can't even remember the podcast name. But anyway, I made a podcast about credit bureaus a while ago.

I used them as an example. So credit bureaus is one option that we can use to determine who we're supposed to give credit to. Because, by the way, this only applies to big boys and big girls. You know, they don't deal with because they paid service and they don't deal with people who are, you know, doing small, small money. Now, credit bureaus are all, I define it now, OK Credit Bureau is a business that looks for information around people's payments and spending and their borrowing history.

They have all the information so that if I come to your shop now and you want to decide whether you're supposed to give me money. But like I said, he's a big boy, big girl thing. So let's say I decide finally that you know what? I'm tired of recording at home. I'm tired of recording in car park. I'm going to move into a six bedroom house. I will take one bedroom and just convert it entire to studio. So I now come to your own place and I say, OK, give me microphone, give me computer,

give me some proofing, give me cabling, give me everything so I can set up the studio by the time you write the bill. Now the bill comes up to maybe call to like, you know, 25 M, something like that, 25 mil. And then I say OK, you know what, 25,000,000 no problem, I will give you 15 now then the remaining 10 million, I'll be paying it 22 million until I finish everything. And then you say OK, no problem. But you now want to decide can I

give this guy this kind of credit? What you will now do is you will now go to credit Bureau. I say credit Bureau. Get this guy Tarish Shima. I've given a bill 25 K 25,000,000. The guy said he dropped 15. Now the remaining 10, he will settle it 2222M until everything finished. Is this guy credit worthy? So is the credit Bureau that you go and meet? So the credit Bureau now because they have access to, you know, my banking history and you know,

stuff like that, they will now be able to say that look, Tavi Schumer is no credit worthy. He's owing these people so, so, so amount. By the way, I'm not owing anybody or they will now say this guy is credit worthy because last year he borrowed 400 million and he paid before all of the loans were due. So he's a correct guy, give him this money. So that's what the credit Bureau does. Also. One moment, he's beginning to drizzle here.

Let me just wind up the window. You know the heat was killing us in Abuja were praying for rains and you know now the rains have come and because of rains, now you can't wash clothes again because if you wash clothes before you dry, it will take like four or five days. And what was that? So the credit Bureau now that ones, I will now tell you, this guy, he's credit worthy, giving the money or this guy is not credit worthy, don't give him the money.

So those are credit bureaus now because it's been a while since I made a podcast episode about credit bureaus. I can't remember the names, but just rest assured that this is becoming a viable business in Nigeria. And at the time I made a podcast episode about credit bureaus. I gave you guys the names of three credit bureaus that I found on LinkedIn. So these businesses do exist and their services are necessary for big boys and big girls to determine who are we going to give some credit to.

Then another way of deciding who is credit worthy as a customer, who should I allow to drop 50% down and then pay the rest later is to look at your existing payment history. Look at your internal records. You will see that some people have a history of consistent payment that OK. Before this guy bought something worth 5K, he paid on time. He bought with the credit he paid on time. After a while he started buying things of 7510K.

He was still paying on time. Then he started buying things worth of 15K. He was still paying on time. Now he wants to be buying things of 22 K and he's asking for credit. You can now say OK, because me and this guy will be rolling from the stage of 2K up until up until 17 Ki think this guy is he's alright. This baby is alright. Let me give her credit. So for those of you who have, who are in the business, what in what will I say in industries where there's a tradition of credit?

Because my, my, my sisters, they used to sell. They used to buy stuff from the UK from Cortana and then come and sell. But you know, stuff for, for women, because they say men don't buy anything. And I wonder why people keep saying that. They say that men don't buy shoes, men don't buy clothes. I mean, like, what do you mean? Do we walk around naked? But anyway, that's what my sister say. And I've heard other people say since then that, yes, that men don't buy anything.

So they used to buy, you know, you buy jeans, you buy a shoe, you buy a bag, you buy accessories, all kinds of things, you know, for men and women, sorry for women. And I noticed that in that particular business, it's like there's a tradition of buying things on credit. Somebody can come to the shop and carry things like 400K, but then they say the cash that they have on them is just 250. So they carry things worth 400K,

they drop 250 now and then they say next month they will give you the balance. And just looks like that's how the industry runs. You know, quite quite frankly, I find nothing scary because also I don't like this whole thing of at the end of the month I'm now chasing you, I'm now calling you and everything. I don't like that kind of hassle, but it looks like it's just one of those things for certain kinds of businesses.

Like I said, certain kinds of businesses because I've not heard of anybody buying car on credit. So it looks like when it comes to these things, you know, women's handbag, women shoe, women breezy women accessories, you know, bungles things like that, not what happens. But when it comes to the car space, it's like the person says, look, shut up. What do you mean credit, my friend? Will you give me my 14,000,000 now cash?

If you don't have 14,000,000, please move. Somebody else is willing to buy this car. So no credit in certain kinds of businesses. So if you look at the person's payment history, look at your internal records, does the person have a history of defaults? Don't give them money. Does the person have a history of consistent payments? OK, you can. You can't take a chance on that. Oh, sorry, this rain is really increasing. I bet you just wind up the whole thing.

So one moment and we just wind up full. OK, All right, so that's taken care of. So I'm looking at my notes so I remember where I was. OK, so apart from looking at existing customers payment history, then there are some industries, this one only applies to big boys and big girls, unfortunately, where you can take trade references. So you can take references from other buyers that person has from other buyers. But of course, be sure to cross check because when you want a reference, usually people always give the names of numbers of people who say good things about them.

So back to this example now where I say I'm tired of recording in the car, I'm tired of recording in the living room. I will enter 6 bedroom apartment. I'll convert 1 bedroom to my studio. And I now deck it up with everything. And I need 25 M to now invest in this place to now make my recording space, you know, correct. So if I go and meet you now and you say OK, no problem, the bill is 25 M, but I want to drop 15 now and then I want to be paying the balance to to M every month until everything is sorted.

You can now say, OK, give me trade references. That means I'll now give information of people that I've done business with in the past. You'll be able to call them up and say, look, Terry Simmons says that he wants to do this, you know, build this. I who pay everything now. How far is he a correct guy? Does he pay his money on time? Was the experience like so the trade references? But of course you can see that is only available for big boys because you can be buying a product that is worth, you know,

7-5 or ten key or 15 key and then be asking for trade references. So this is just for the big boys and the big girls, but that's an option. Then I came across a test about some of us can use now that financial institutions use. So let me check the time. OK, This is 9:45. OK, I have to leave here in another 20 minutes. OK, So this is a test that financial institutions use to determine who they're going to give money to.

So if you go and you want to collect loan from access banks, Zenith banks, Stampic, IBTC, all these people, you know, there's a certain there's a test that they will use. But of course, if you remember from previous episodes, if it is for business purposes, you also have to make sure that you have your business plan, Make sure you wrote your business plan. You know, everything in check dot your i's, cross your T's, your protections are all there.

You know, they need a business plan to make that decision decision. But then there's also another test that is called the 5C test that I found and let me share with you today. And the 5C's are character capacity, capital, collateral and then conditions, I repeat and then I'll explain. So character capacity, capital, collateral and conditions. Now character just means willingness to pay. We're trying to figure out this person's willingness to pay.

That's what character means over here. It doesn't mean this person a good person or this person is a bad person. So I can be a non born again Sinner, non believing, whatever. But you know, you don't care about that. You only just that you want your 25 M because you've given me equipment for my studio. So when we say character, we're concerned with willingness to pay. You know, you're not concerned about whether I'm a good boy or a bad boy.

If I'm a bad boy, that's up to me. You only just want your 25 M So that's what character is all about in this context. So that is how, you know, we've been trying to figure out, you know, looking at payment history, the credit Bureau, you know, they're just trying to answer the question of character. Is this person willing to pay? Has he done things in the past that can give us good reason to believe that in the future this guy will be willing to pay?

So we already understand character. Now capacity. Capacity is a question of cash flows or income. Does it look like this person has money coming in that can sort this thing? And that's also something that we do on an individual level. Somebody says, I beg give me 15 Ki will sort you next week. And the person that is talking to you, you know that this person is a lawyer and he's ending in hundreds of thousands and he doesn't OK, you know what, this is a rough patch.

Let me just send this guy 15K, you know, next week he will sort me back. You know, that's the question of cash flows. That is just the thing essentially. So there's some people that do things like that, that somebody comes to your shop, the person says, OK, everything is 400 Ki, want to drop 300, I'll pay the rest. But, you know, maybe because you guys hang out or something, you know that. OK, normal, normal. This guy is a big boy.

Maybe there's some small downtown, but there's a container on the high seas, so you're expecting something to click. And yeah, so that's the whole thing. Cash flows, cash flows, income. Does it look as if the person, as if enough comes in? And when I tried getting a loan from Sterling and that's how Sterling disqualified me. So I went to Sterling. This was a long, long time ago. I went to Sterling. I said Sterling, I heard people are giving loans.

I say yes, Sir, I was OK, good. I want a loan of social. So they said no problem, Sir, can you give us all your account details? I said account details were so do you have other bank accounts? I say yes, I do. So I furnish us the bank details. So I give them the details of all my accounts. Then they run it through some fancy AI software, something to analyze. All the cash flows, how much money comes in, how much money comes out.

And so I'm say they please confirmed are you an employee or yourself employed? And say self-employed say OK, OK, yes, yes, yes. Because based on our analysis, we can see that the cash flows that come in are not regular and they are not what's that word? I can't remember, but not a steady amount 'cause if I say salary earner, you'd be seen that every single month 400K will just be entering my account. Bam 404 hundred 404 hundred since I'm self-employed and you know my income is based on also,

you know, there's sometimes when the money will enter big bum and then next month zero, then maybe the month after that medium and then maybe another two months big money bam. So so they said because of that now because the money is up and down, up and down, The thing is not coming constant. We say they will not give you a loan. They say, OK, thank you very much. I didn't get a loan, but at least I got an education about how banks decide on who to give people money.

So that's this capacity. Now, cash flows is money coming? Is money going? OK, Money is coming and going on a regular and it's coming steady every month. I can give this guy a loan. I can give this baby loan. Then capital. You're trying to gauge people's assets or investments. That's the one that Nigerians do a lot of time, which is that they will, they will, they'll be reaching you, they'll look at you up and down. They'll look at your shoe,

they'll look at your watch, they'll look at your car. They'll say this guy has assets. Now let me give him a loan. By the way, he's not a guarantee that because the guy is driving Ben's Jeep and he's wearing Rolex, he's not a guarantee that he'll pay you the money or so be careful when it comes to this whole thing of assets, assets and investments. So yeah, this one that we do a lot, you look at people and then you rate them up and down.

I've been disappointed before and I can assure you will you will surely be disappointed if you are looking at the car they drive, the house that they have, you know, things like that. But yes, financial institutions, they look at people's assets, you know, what are the old, the holdings that they have, you know, things like that, what the kind of things that they involved in. So capital is it then collateral? Collateral does means what are you dropping just in case you can't pay so that they will now collect money back.

And of course, we all know that banks love landed property, especially landed property in commercial districts. So if you go and borrow money and you have 5 plots of land in Wusetu, you drop one plot of land, they'll be very happy. Or you have one plot of land in Leki, you know they'll be very happy to give you the loan because you know if you default, they can take the land, they can sell it, they can make their money.

So what are you dropping? So there are some businesses that ask people to drop to drop collateral. So yes, you want credits. No problem. We'll give you the credits, but then drop this with us just in case. Then. OK, conditions. That just means economic factor because economic factors, because sometimes the economy is good and like, OK, economy is good, this guy might pay. And then sometimes the economy is bad, the economy is seriously dry and you're like, I can't give anybody loan now because in this thingable economy, if I

give anybody loan, the chances that they will default is high because we're in periods of hyperinflation. So that's the 5C test. Look at the person's willingness to pay. That is character. Try and figure out the person's cash flows or income, that is capacity. Try and figure out the person's capital, the kind of assets that they have. The rationale there is somebody with big assets will be able to pay you, Somebody who has more assets will not be able to pay you and collateral, no problem.

What is the person dropping? Is the person dropping something substantial? No problem that some of these loan companies now you deposit your title documents for your car or something like that and then you collect loan. You know the idea being that if you can't pay back your loan, do come and seize your car then. Well, at least from based on advertisements I've been seen in Abuja, it looks as if that's how people want to run this thing.

But I haven't heard of anybody who has. I haven't heard of anybody who has collected loan from these companies or who has gotten into trouble yet. But I'll keep you guys posted. Then also, the conditions, you know, is the economy flying or not now determine whether I give loan? So these are some of the things that I spoke about when it comes to determining who is creditworthy as a customer. However, there was one point that I wanted to stress then and I'm stressing it now.

The problem sometimes it's not that you're giving credit to people or not. The problem is you have not determined these policies in advance before. How do I put it? If you wait until somebody comes to come and ask you, OK, how far, let me drop 80% now and then pay the rest, you create lots of problems for yourself because you haven't thought about all these things in advance. You need to sit down with your husband or sit down with your wife or with your business partner or with your mentor or with your whoever and determine this thing in advance as a business, what is the policy?

Will I give credit or not? And if you and your spouse or your mentor or your advisor, your whatever your accountant, you decide no credit, then the answer will be always no. Chukudi, you're my guy. I understand. But you know what? This is beyond me. Me and Madam, we sat down. We already discussed, and the accountant has signed off on it. And Chukudi, Bros, I beg no Vex. This is beyond me. You know, I can't give you, I

can't give you the credit. You're my very guy. I trust you. You're my guy. As in, you know, since, well, five years old. You're my guy. But look, this is beyond me. Me, Madam Accountant, if you can convince Madam an accountant and no problem. But you know I can't give you the credit. So once you've decided no credit, the answer is no. But if you now decide that we will be given credit, sit down with your spouse, sit down with your business partner, sit down with your accountant, sit down with your mentee, sit down with your pastor, sit down with whoever it is whose opinion you value in these things.

And you now determine if we're giving credit, how much credit are we going to give? If normal, normal, you allow people to be taking credit on items that are 100 hundred K100100K, the day you decide to give credit that is on, you know, 10s of millions that can be the one that will bankrupt you. 100100K people have been paying. People have been paying the one that is 100 million. You now give credit, the person defaults and then wahala, the business will now collapse.

So we decide how much. Credit are we going to give for how long can we allow people to owe us for two months, three months, six months, six years? Decide the how long thing especially because that's that's what will now let you know when you should now get lawyer involved or police involved, or village people involved, or church people involved, or church or mosque people involved or village elders involved. You know, so you.

Determine how long. Then you also determine the interest. If we're letting people have credit, are they paying us back the exact amount or every month? Are we going to be adding one 1% or two 2% or 1010%? Decide. Then. If we're going to allow people to have credit, are we going to be giving them, you know, 100% free? By the way, I do not because of the rubbish I've seen in the event space, I do not advocate at all that you allow somebody to have credit 100% in advance.

I do not. Anyway, like I said, business traditions, you know, determine because if you want to put your products in retail shops, actually the whole thing is on credit. The person who? Owns the shop. If you want to sell your things now and you want to sell it in, they select Grand Square in Abuja. When you go to Ground Square, Ground Square will not give you a cover. They will collect your product and then they'll put it in store.

They want to sell it first, then they'll put it in the contract that payment terms is net 30 or net 60. What that means is you can deliver chicken, excuse me to Ground Square and that chicken consignment is worth 6,000,000, but they are not paying you until two months time. So unfortunately for that kind of business, that's just how it works. You're always on credit, the shop is always owing you. You know, you either like it or you don't.

And that's why I tell people who want to get into shops that are you aware that this is their payment terms? Like you can't negotiate, you can't change it. It just is the tradition, whether in Nigeria or Ghana or the UK or America. I don't know if it's the same in Afghanistan or Australia, but these countries that I've mentioned, I know that one for sure. If you want to go and put your thing in a major shop, just know now they are not paying you nothing.

They want to sell it first and then out of the sales, they'll now want to pay you then they'll now put it in their contract that we won't pay yourself after 30 days or pay you after 60 days. So it is very possible that if you're doing business with these chain stores that you will drop your product 1st of January but you won't see payment until 31st of March. So it happens, you know, read your contract, your contract properly.

So I said all that I prefer let somebody drop something a partial advance. In the wedding. Space in Abuja anyway, we had a tradition that's during my own set photographs in my own time, we had a tradition of you try and collect like 70 or 80% of your money so that even at 20% if they don't pay. So if she's gonna check time, OK, almost 10 after leave here at 10. So if they don't pay, at least at least it's not too bad.

At least you covered your costs and you had small money for fuel and shawarma and credit. But you know, you're not in too much of a bad place. So my own personal opinion, sha, this whole thing of oh, you're my guy, just carry it. Just go. Don't do that. Let the person drop something 30%, fifty percent, 80%. You know it's you know. But The thing is, determine it ahead of time. So if you've sat down with your spouse, with your mom, with your dad, with your mentor, with your pastor, with your imam, with your business advisor, with your accountant, and you have decided that we'll do credit on partial advance, but everybody must pay 85% and your homeboy comes and he has 83%, the answer is no.

I have. Discussed with my board. This thing is beyond me. And as a. Board or as a business we have decided that people must pay 85%. So Chukudi my guy. I understand things are rough and I know you only have 83% bonusly Chukudi between you and me. I swear down I can't do this thing. I can't, you know, if you can't. Convince Madam an accountant and the board, you know, this is a business tactic where you push the responsibility to other people.

So if you can convince Madam accountant, pastor, Imam, mentee, if you can convince all of them, sure, no problem, we'll take your 83%. But you really know Vex, I beg is beyond me. 85%, that's all we need. If you have 80 percent, 85% now I will sign this thing and we'll get this thing done. So decide in advance. Then he also determine whether people are going to bring guarantors or not. But. Don't wait until somebody shows up.

They now start trying to figure this out. This is the wrong time. You'll be under too much pressure. You might be under cash crunch pressure. OK, let me just collect money shall let something be going. Or you might be under personal pressure to give my be pressure on you like an attavation as me. Now what kind of rubbish is this? I might know your boy. I've been there for you. You'll be under kinds of pressure. So determine these things in advance.

The worst time to decide is when the person is in front of you. Please, if you didn't learn anything today, learn that one then. From a sales perspective, these are things you always bring up in qualification conversations. Oh, fantastic. You're interested in this and this. OK, no problem. Option A, Option B, Option C. You're aware that they can cost anything between 5 million and 3.5 million. Is that something you're willing to invest in?

Say it upfront so that the person who thinks your prices are ridiculous let them run away. The person who thinks he can make it but he will need some help. The person who mentioned it now? OK, Between 3.5 and five MI think I can make that? Are you open to flexible payment options? Then you don't have the conversation. Oh yeah, sure. No problem. We're open to it. The policy of the store is that you make a depositive so, so, so amount and then the rest of the payment is supposed to be on this, that, that, that, that,

that. Is that something you're comfortable with? The person says, oh, OK, fine, no problem. Continue. The person has been advised. Well, you see. You have the conversation at the beginning, you don't wait until the end. When it's now time for delivery and everything, you now start having all these conversations. Have these conversations early. For me, This is why I like to bring up pricing early in the beginning, you don't know enough to give an exact price.

So always give them a range. OK, based on what I've been discussing, it looks like we can between ABC and XYZ. Is that something you can afford? Is that something you're willing to invest in? Is that something you're are you willing to move forward on those terms? You know, try and get feedback. They will say yes or they will say no. Either way, you know where you're heading. So bring these things up in advance. Then another thing that I

mentioned, apart from determining all these things in advance, you also have to be proactive and monitor payments. If they say they are going to be paying on the 15th of every month, you don't wait until 16th, 17th before you start calling these people. Be proactive on the 1st of the month, say true Goody, what's up my dear? Now Brobeck, Novak's nobody say I don't stress you, but sure you know 15th I'll be so I don't.

I got you 15th no problem. You see the money. In fact, you won't even reach 15th. On the 12th, I'm expecting some money. You will see payment on the 12th and I said you could be how far? Oh bro I beg no vex I forgot the guy on our big transfer. You stay on top of it. Your payment date is 15th. You don't start harassing people on the 15th, you start harassing them before the 15th. Whether they start one week before, 2 weeks before I leave it up to you.

But if you wait for default man that is stress. Serious serious stress. So be proactive and take quick action. Then when people are overdue, if they're supposed to have paid on 15th, they haven't paid on 15th is now 31st or more quick action. And that's why I say you determine these things ahead of time with your Business Council, with your board of director, with your spouse, with your accountant, with your whoever this person is overdue.

What are we going to do? Is it lawyer who will call? Is it police who will call? Are we going to call family and friends to shame the person? Why are we going to call wait until we go for PowerPoint meeting and then involve the elders, you know, from the village? But either way, take action. So those are just the main things. Determine ahead of time what the policy policy is. Monitor payments and be proactive. Don't wait for default.

If you wait for default, if you wait until the 16th, the 17th, you're giving yourself unnecessary BPI can assure you. Then. Also be aware that for certain industries buy now pay later is becoming a thing, so for solar there is buy now, pay later. So if you're on the. Solar sales, you can go and speak with some companies. One of my clients, they have those sorts of arrangements in place, so for them it's not a problem.

Somebody wants to buy solar, the amount on the bill is 40 M but they say they only have 25 now you want to pay the rest later, it's not a problem. This service. Provider that do send them to call these people, You guys will negotiate the terms. As soon as you're done negotiating the terms, we'll deliver all the solar panels to your house. So for solar, it's done in Lagos. For mobile phones and digital gadgets and things like that,

it's done in Abuja, it's also done. So ask around in your industry, try and figure out if buy now pay later is is available because that that will help you to de risk collection on your part and make business easier. So those are just some ideas around determining who is your creditworthy customer and figuring out you know, when to give people credit. But from my own personal opinion, to be honest, I find this thing very, very scary.

So as I did, I just stick to my wedding photography days and I try and collect my 80% upfront. Then also try and research the company that it is Because there was one time somebody was trying to do business, one company mom, she called the person outside and said, look, let me be frank with you. You know this business, they have a reputation. These people, they never pay all their money complete. So this is what you do, this amount that you have on the invoice, is this what you like?

The person say yes, I said no, no this won't be enough. Take that and then increase it by XYZ amount because this company they are going to meet, they have a tradition of only paying people around like 7080% of the money. So you'll be able to collect that whole thing full. And the person was thank was all thank you very much ma. Thank you ma. Then they changed the voice and they went ahead and then guess what happened as mom she said at the end of the day the company only paid them 80%.

I refused to pay the 20%. You, that person came back to come and tell my mom, thank you, mommy, thank you, thank you. The thing happened exactly as you said. If I didn't do it, I would have been in serious busy right now. So always be doing your due diligence that OK, you go and ask around, you know, who has dealt with this company before, who has dealt with this person? How is this person? How do they do? How do they behave?

You know, always do your, you know, do your diligence because men or some of these things, especially when the contract is millions and millions and millions after you've delivered do now start especially in Nigeria where if the person you're dealing with is a, is a big somebody, you know, he's a politician or he's a big boy, he's a big girl. You can't call police to harass him, you know. So anyway, let me just leave you there.

Besides, I have to run anyway. So that's all for today folks. Remember if you'd love to connect then call SMS or WhatsApp me on 08064662140. Thank you very much for your time and attention. I will catch you next time. Same place in your headphones or in your speakers.