# SMB Payment Collections And Cashflow Management

> A NachoTuesday interview — the C-Suite Insights series from NachoNacho, the B2B SaaS and AI
> marketplace. In conversation with Jeremy Crane, Founder, Retrievables.

- **Page:** https://nachonacho.com/nachotuesday/video/SMB-Payment-Collections-And-Cashflow-Management
- **Guest:** Jeremy Crane, Founder, Retrievables
- **Guest on LinkedIn:** https://www.linkedin.com/in/jeremywilliamcrane/
- **Recorded:** 2023-11-17
- **Watch:** https://www.youtube.com/watch?v=XSpXabpZeUA

## Summary

In this NachoTuesday Andy Karuza interviews Jeremy Crane, Founder of Retrievables. In this interview, they covered tips for acquiring early revenue and discovering new revenue channels, how to structure agreements to protect your cash flow, and common cash flow tips to keep your company financially healthy and growing. If you're serious about financial health for your SMB in 2023 and beyond, this webinar is for you.

## Product discussed

- **Name:** Retrievables
- **Page:** https://nachonacho.com/product/deal-retrievables
- **What it is:** Retrievables is a marketplace that connects businesses that are owed money to collections attorneys.
- **NachoNacho deal:** Free Consultation + Reduced Rate
- **Estimated savings:** Save up to $1,000

## Full transcript

Good afternoon everyone and welcome to another Nacho Tuesday. Today, I have Jeremy Crane with Retrievables, and I'd love to start with him introducing his company and what they do. Yeah, so Retrievables is a marketplace where we connect businesses that are owed money or holding delinquent accounts receivable to law firms that specialize in collections. Basically, companies that have money owed to them can come onto our platform, enter all the information about their delinquent debt, and then we have a network of law firms that can view and assess those cases. Ultimately, they decide whether to connect with those businesses and help them with their collections needs. That's great. We know a marketplace all too well over here. Have you seen an uptick in the number of people needing collection services, given the current economic situation? Yeah, it’s tough to tell if it's the economy or if it's our business growing, but I think it’s some combination of both. The economy definitely presents a bigger need for collections than there was maybe three years ago. Definitely. So, how did you get into this? We'd love to learn a little more about your background. How did you get into collections, and where did this all start? Well, I hate to use the term, but there's no better term for it: I’m a serial entrepreneur. My first venture was actually a used furniture business in college. Prior to Retrievables, I had a company called Stadium Park, which was an app for stadium, arena, and event parking payments. It sounds more exciting than Retrievables, but I think collections is actually more suitable for me. I got into legal collections while working at a collections law firm, doing marketing and business development. There, I came to understand that small and medium-sized businesses and lenders are often not very efficient at collecting money and sometimes don’t even try to collect it at all. I also realized that employing a collections law firm is the best way to collect money, and it’s an underutilized field that’s not very well known. So, I decided to bring this solution to the masses and to SMBs throughout the United States and actually throughout the world, to provide easy access to collections law and the best way to collect money. That’s a great point. Many companies probably assume it’s really expensive to retain a lawyer, but do a lot of these firms work on a commission basis, taking a percentage of the funds they collect? Almost always. Nearly all the collection law firms we work with operate on a contingency fee basis. It’s important for a company to keep its money coming in; otherwise, it can’t grow. Right. It takes the risk away from the company and places it more on the law firm, creating a creative partnership between each law firm and their clients. Exactly. Nobody likes to be the bad cop, so outsourcing that role to someone else can be beneficial. Great. As far as getting paid, which is crucial for growing your company, what other financial tips would you offer for entrepreneurs looking to grow their business step by step and keep their cash flow in check? In terms of cash flow and collections, I always think it's important to make it easy for your customers to pay. ACH is the best option, followed by credit card payments. Accept checks if necessary, but try to minimize that. It’s all about making it easy for people to pay. Another thing is to clearly define and communicate your collections policies and methods so that companies know what to expect. The biggest thing, though, is establishing in-house processes. Understand when payments are due, when you’re going to reach out, and who in the organization is responsible for reaching out. There are businesses that specialize in accounts receivable management and can help facilitate these activities. After all that, there will always be people who don’t pay, and that’s where we come in. It’s important to have a solution when a business’s in-house collection efforts are stalled. (05:28) To be able to collect that money, as I said, employing the use of a collections law firm is the best way to do it. Retrievables is here to help people find those attorneys. Is there a good balance that you would recommend in terms of how much you keep in accounts receivable, so you don’t overextend yourself? For instance, an 80/20 rule or something similar to ensure that businesses don’t have too many outstanding payments that could drastically affect their cash flow and put them in a bad spot? (05:59) I’m not sure exactly what that number is, as it varies from industry to industry. For example, if you're talking about SaaS companies, like the ones on your platform, it should be minimal because SaaS companies are often paid monthly by a credit card or a bank account that’s held. However, if you’re a construction company or a distributor/manufacturer, those types of businesses might have 30 percent outstanding at a time. It’s more of a constant effort to manage. So, it really depends on the industry. Ideally, the best percentage is zero. (07:08) What tips would you offer startups to acquire some of their first initial sales and revenue? Since you’re a serial entrepreneur, how do you go about aligning product-market fit and getting your first customers in the door? (07:45) There’s a lot of persistence and passion required. Almost always, it’s the founder of the company who goes out and gets those initial customers. When you’re getting your first ones, you really have to convince people to trust you, your company, and your mission. Thinking back on when I started, I remember making over a hundred cold calls per day in addition to everything else I had to do as a founder. I also had to be really creative, reaching out to every small business owner I was connected with on LinkedIn. I looked at the sides of trucks, called the numbers of businesses listed there, and we still do it sometimes. We started our business in Massachusetts and joined small Chambers of Commerce, even in remote areas, to build relationships and gain customers. So, I would say to be determined and creative in a low-cost way, and you’ll get there if you’re determined enough. (08:55) We always say at NachoNacho that we like to be everywhere all the time. Our friend Coco at Nimbler, a sales lead generation platform, also recommends cold calling. He points out that many people don’t do it anymore, so picking up the phone can come across as more authentic compared to sending cold emails, which can become overwhelming and ignored as they get overwhelming. (09:24) I completely agree with that. Cold calls are very effective, although they are very hard. In my career, I don’t know how many cold calls I’ve made—between ten thousand and a hundred thousand. Even now, every time it’s hard, I have to take a deep breath and say, "Okay, here we go." But it works, especially with small businesses. Some of our target audiences still involve a lot of cold calls, and although I’m not the one doing them, I did about 20 yesterday. Once it’s in your system, it’s hard to let it go. I still did a few this morning. I see phone numbers and start calling them. (10:16) What other tips would you offer SaaS companies to manage their cash flow better? Any ideas on how they could grow their business brick by brick, dollar by dollar? (10:52) For SaaS companies specifically, having recurring payments through ACH and credit cards is important. Another issue that SaaS companies often face is renewals and contracts, where disputes can arise. It’s crucial to reach out to your customers before the renewal date to ensure they’re satisfied. Sometimes, you can also add on services. For example, when we were up for a renewal with HubSpot, they contacted us well in advance to discuss our plan, what we were using, and what we weren’t. I thought that was great. SaaS companies should work with their customers, understand their needs, budget limitations, and make sure they stay on as customers with their credit card still attached and getting billed every month. (11:24) The most effective approach is very consultative. By checking in on the service, ensuring everything’s working properly, and addressing any questions or needs, you build better relationships. This approach can lead to consultative sales, where customers might realize they want other features or upgrades, allowing you to potentially upgrade them to a higher subscription level. (12:20) Many startups are attracted to landing big deals early on. What are your thoughts on that? There can be risks in relying too much on one particular customer, both in the early stages and later on. Many companies have a lot of their business consolidated with one vendor, and if that goes away, a significant portion of their business disappears overnight. What tips would you recommend for businesses to mitigate that risk? (12:48) First of all, you should never have just one buyer or one supplier. Some businesses rely on a large government contract that they have to bid on every ten years, but I’m not sure how valuable those businesses are. In the early stages, focusing on the core of your business and targeting smaller, lower-hanging fruit is wise. As you grow, it's smart to also pursue larger companies. (13:26) The sales cycle is typically a lot longer as you get into those discussions. You begin to understand the needs of these larger companies and must react quickly to make your product or service attractive to them and suitable for their requirements. I was just thinking about Microsoft, for example. They were a very early company when they made a partnership with IBM. At that time, they didn’t have all their ducks in a row, but they were confident they would make it happen quickly. We’re not Microsoft, but we have had some large law firms and businesses trust us early on. You have to learn and move along with them, fulfilling their needs while building and sustaining your business with smaller customers as well. Diversity is key, but a big company can change things overnight for the growth prospects of your company. (14:44) When setting up those deals, do you have any tips on how to structure the agreement to protect your downside risk? For instance, if you’re Microsoft partnering with IBM in the early days, which is great for your business, but if it falls through, it could put you in a bad place. (15:14) You need to protect yourself by having several smaller clients and not relying on just one potential opportunity. It’s essential to have multiple potential opportunities—ideally five or ten—so you’re not waiting around for one person who hasn’t responded. Having many irons in the fire is crucial. In terms of negotiating and making a deal with larger organizations, any agreement must work for both sides and be fair. Bottom line fairness is what I always target. (15:46) What are some common operational mistakes that startup founders make, especially in the early days of their company, that they could avoid? (16:28) Hiring is a big issue. Startup founders often hire too quickly and not very carefully, wasting money and time. Sometimes people are hired who aren’t necessary at that time. Founders can also lose focus and lack a clear plan. Things change in startups, and while you might need to pivot and test new ideas, you always have to return to the mission and goals to avoid losing focus. These two things—careful hiring and maintaining focus—are critical and commonly seen as mistakes. (17:10) Another issue is that founders may take on too much themselves. There’s a shift when it’s just you or a couple of founders doing everything and then building a team. You must learn to delegate tasks and trust the people you’ve hired, especially if they’re the right hire. This can be challenging because founders often have a deep personal investment in their business. Delegation is key to leadership. If you have the right people, trust them to handle their responsibilities. (17:44) It’s challenging to let go because it’s your baby, but delegation is crucial. As you mentioned, shiny object syndrome can also be an issue. It’s easy to get distracted by specific requests from individual customers that don’t align with your overall vision. Maintaining a clear vision for your product and business helps you make decisions that add value to the company rather than chasing fleeting opportunities that don’t serve your broader goals. (18:37) Staying grounded and standing your ground is important. You want to be flexible for your customers and provide what they need, but sometimes you have to stick to how you do business. It’s essential to maintain focus on your core vision and goals. (19:02) As far as hiring, what do you look for in early-stage employees? There’s a difference between people who fit well in a large corporation and those suited for a startup environment. What traits do you look for in startup employees? (19:37) It’s important to hire someone with experience in the role but also someone who has worked in a similar stage of business. They need to understand what it’s like to be in an early-stage company. The key trait to look for is motivation by the growth of the company and a desire to be a critical asset in its development. This enthusiasm often comes through in interviews, as motivated individuals are excited about the mission and the opportunity to contribute meaningfully. (21:19) Regarding failure, as an entrepreneur, we encounter it frequently. Do you have any great lessons on failure and what you’ve learned from those experiences? (21:37) I don’t really believe in failure; it’s about how you frame it in your mind. Outcomes are based on decisions made, and if you make sound, calculated decisions without letting emotions take over, you can’t consider an outcome a failure. (21:49) Failure, however, provides a lot of learning opportunities. Some of the things I’ve learned include being honest with everyone, staying true to yourself, being an expert in your field, and working really hard. That part is unavoidable. A lot of people don’t realize what they’re signing up for when they become entrepreneurs—working 10, 12, 13, or even 14 hours a day. (22:28) If you love what you do, it’s true that you never work a day in your life. I’ve always worked crazy hours, though I don’t do 100 hours a week anymore. At 38, I can’t really keep up with that pace. However, I still put in a lot of hours because I love doing what I do. At some point, you need to sleep, but I always make sure I get my seven hours of sleep per night. (22:53) If you get your sleep, drink your water, and take care of the basics, you maintain a good state. When you are working, you’re focused and have the energy needed. (23:20) Early on, we faced two significant challenges. One is common to marketplaces: managing the balance between supply and demand. Initially, we had more attorneys than businesses, which meant attorneys weren’t getting enough value from the marketplace. To address this, we ramped up cold calls and improved our marketing, particularly with Google Ads, to drive more traffic. As business increased, we faced the opposite problem—more businesses than attorneys. So, we had to find ways to attract more attorneys, which included more cold calls and outreach. I also started attending conferences, which proved helpful in making connections in this tight-knit industry. (25:02) The other challenge was fundraising, which is inherently difficult. I began with a personal investment of $2,500, which taught me to be lean but also restricted what I could do. To overcome this, I focused on making the best of what we had and generating early traction. We started at an accelerator in St. Louis and raised an initial funding round of $200,000, which helped us get off the ground. Shortly after, we raised another $800,000. The key to overcoming fundraising challenges is to focus on growth and engage in a lot of cold calls and outreach, making personal connections with investors. (26:19) Investors often appreciate a personal touch, so personal introductions or even cold calls can be effective. Many startups make the mistake of relying too heavily on raising funds without focusing on product-market fit. Money can help scale a solution, but it won’t fix a lack of product-market fit. Testing a lean model and ensuring you have a strong foundation is crucial before scaling with additional funds. (27:13) Unfortunately, some startups think that raising a large amount of money will solve all their problems, but that’s not the case. It’s a tough fundraising environment, so kudos to those who succeed. It’s starting to pick up a bit, which is good for startups. (28:07) As for why customers should choose Retrievables over other services, there really isn’t anyone else focusing on B2B legal collections the way we do. We’ve built a strong reputation in the legal collections industry. We make it easy to find collection attorneys, who are often hard to locate. We have a great network of vetted attorneys, which makes it simpler and safer for businesses to collect money. Retrievables is the best way to collect money efficiently and effectively. (29:17) Many people don’t know where to look for help, and even if they find something online, they may not know if it’s reputable. Retrievables offers vetted attorneys with proven track records, providing a safer option. (29:46) Thank you, Jeremy, for joining today. As a fellow New Yorker, I appreciate your time. For anyone interested in B2B SaaS and services, check out Nacho Nacho—the best place to buy SaaS and services. Thank you again, Jeremy, and we’ll stay in touch. My pleasure. Take care.

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