Cash flow in our business did not used to be a problem—it was always one of the major perks of producing a trade show. Now some shows are having problems keeping incoming revenue ahead of outgoing expenses. That is because many exhibitors are taking advantage of the market downturn—and holding back on making those advance payments.
To keep your cash flow positive, the overall goal is to speed up collections and slow down payments. Here are some tips:
Never assume a yes is a yes. Continue selling the benefits of the show till you get the first payment (and a signed contract).
A signed contract is critical because it allows you to enforce your payment policy. And one clause must be—you sign the contract, you owe the booth fee even if you cancel.
Have a no exception rule that exhibitors must be current with your payment schedule to be allowed to order onsite services. And be sure your contractors know who is delinquent.
Really push early bird conference registrations—such as a 50% discount four months out.
Negotiate better payment terms with the venue—such as 10% 12 months out, then 30% eight months out, another 30% four months out and the final 30% 30 days out. Do the same with your contractors.
P.S. If you offer a discount for early booth payment, word it this way: "Amount due $2800. Deduct $200 if paid by September 1." Do not say, "$2600 if paid by September 1." In the latter case, the exhibitor will fixate on "$2600" and that is all you will get even if the check arrives in January.