Depending upon the economy in general, a particular industry or the specifics of a given company, business owners often fall victim to complacency. The attitudes and perceptions that feed into this complacency include:
- We’ll wait and see how things turn out
- It’s really not that bad
- We’ll sell our way out of the problem
- The next quarter will be better
In many instances, the business owner is ignoring or misinterpreting trends and/or is in denial. They’re hoping against hope that things will change for the positive. Unfortunately, crossing your fingers is not a viable strategy.
Complacency and indifference are killers of businesses.
Arriving at the point of financial jeopardy often times is a result of “Trend Creep”. Small, incremental and sometimes imperceptible points of deterioration chip away at the financial structure of the business. If left unchecked, the viability of the business as an ongoing concern is at risk and potentially to the point of no return.
The better approach for the business owner is to recognize that a plan must be in place to head off potential financial disaster. Understanding the metrics of the business and establishing parameters of financial assessment on an ongoing basis is key in identifying negative trends or triggers early on.
As part of this assessment and planning, developing corrective actions and strategies is imperative. Proactively envisioning various scenarios gives the business owner the ability to consider options and make decisions in an atmosphere of reduced stress and susceptibility to negative financial impact. Potential operational issues include:
- Declining sales
- Margin compression
- Need for expense reduction
- Industry wide negative event
Financial issues include:
- What if my customers delay payment of my invoices?
- What if I can’t pay my suppliers to fulfill a purchase order?
- What if I’ve maximized my current bank financing and need more availability?
Working side-by-side with you.
At Liquid Capital, we’re advocates of this type of planning and strategic thinking. Clearly, we’ve dealt with situations that are fraught with time constraints, emotionally charged and potentially perilous for our client. However, having time to consider various situations and looking at options to address them gives the business owner an informed frame of reference. We work side by side with the business owner to look at the big picture and if appropriate utilize our various financing programs to address their needs. They include:
- Accounts receivable factoring
- Purchase order financing
- Work-In-Process (WIP) financing
- Asset-Based Lending (ABL)
The unique Liquid Capital business model (business owner working with business owners) and direct relationship orientation is highly compatible with the proactive stance needed to avoid ending up “Too Far Gone”.
If I can be of assistance with any prospects or clients in their planning efforts, I’d be happy to do so.