00:00Speaking of entrepreneurship and, of course, our community, can we talk a little bit about like what's your perspective on the most urgent matter facing local Black-owned businesses now in this era of COVID-19?
00:14Yeah, from my perspective, you know, I have the opportunity, at least before we put everything on travel restriction, to be out with a lot of businesses of all hues and segments.
00:30What I primarily see within the community at large is that the inability to have reasonable cash flow or to be liquid for more than a month or two is always the issue.
00:44But the problem is more acute for Black-owned businesses, which in many cases don't have it.
00:50I think it's beyond 20 or 27 days.
00:53Sekou will correct me with the exact number, but basically it's less than a month.
00:58And for many of them, it's not because they are not generating the revenue.
01:03It's recognizing how you need to pay your suppliers and what you need to do with the money that you've earned so that you're creating a cash buffer
01:12so that you have the ability for like a rainy day fund if something goes wrong.
01:17Or if you end up, you know, having this fantastic employee that you need to pay, you know, $3,000 more.
01:23You want to be able to do that and make those good choices.
01:27And unfortunately, because people are so focused on what they're doing, what they have passion about,
01:31it's these financial matters that kind of get in the way of them being able to do what they want to do.
01:36But one begets the other. You can't be focused on your passion and your ability to have your own business at the same time,
01:44not be minding the store about the money because that's what goes out the back door.
01:48And that's what for most entrepreneurs who don't find the success that they're looking for,
01:53it's primarily because they don't have the cash flow that they need at the moment in time in which they need it.
01:58Got it. So, Christopher, and Saku could also answer this.
02:04While you were talking, you did mention that rainy day fund.
02:08And I think that's something that personally I do a lot of content where I'm talking to small,
02:15like just beginning, starting out entrepreneurs.
02:18And I don't know, a lot of these discussions revolve around just kind of making sure that they're doing
02:24what they need to do with the capital in the very beginning, making sure that money is kind of dispersed
02:30where it needs to be. And on more than one occasion, I've heard them say that, you know,
02:35that rainy day fund that they should have had, that money wasn't there when they went through a period
02:40where their business, you know, wasn't in the greatest state.
02:44So what I want to know from you guys is what advice do you have for entrepreneurs trying to figure out,
02:50like, you know, what that, how much that rainy day fund should be?
02:56Yeah. From my perspective.
02:59Yes.
03:00I think that you should always be planning for at least eight weeks.
03:06Ideally, you have three, you know, three months.
03:10That would be ideal, but it's very hard to build up to that.
03:13And it requires a tremendous amount of discipline in terms of what you're buying from your suppliers,
03:19how you are working with your suppliers to ensure you're not paying a penny more than you should.
03:25And also being able to leverage the difference between and making certain that you're also getting money back
03:31from the people who owe you money.
03:32I know in many cases, you know, my dad owned the business for over a quarter century and his biggest challenge was always getting the bills paid to him
03:42when people are for the services that were rendered.
03:44And some cases people would be late by 10 or 15 days and that adds up over time.
03:50So your ability to actually get paid on time and be able to squeeze those suppliers just a little bit more starts to build that fund over a period of months.
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