As a family owned small business in the flooring and tile industry, this Greenville South Carolina business was experiencing repeated cash flow issues.
We have a lot of business and loyal customers and we run on minimal expenses but for reasons that escaped us we were constantly in a position where we never had enough cash to order products." says the business owner. "It seams we were going from one deal to the next with not much to show for it.
CNVRG was referred to this flooring company from a home remodeling contractor that had used CNVRG to rebuild their web site and develop an online store.
"I met with the husband and wife who ran the flooring business at a local coffee shop. We sat down and they explained their business model. It was immediately evident that their problem was they were acting like a bank." Says Jim Sevier, Founder of CNVRG. "This client would allow customers to place an order and take delivery on products and would float them up to 90 days before payment was due."
BUSINESS ANALYTICS AS-A-SERVICE
It is a normal practice that when a business sells a physical product they allow time for customers to pay the debt. In most situations that float time is 30 days. This particular client was buying products from a supplier and had 30 days to pay. However, they were selling the products to their customers and allowed them 90 days to pay. The extra 60 days was eating into their cash flow.
"I have found that many businesses are struggling only because they are looking at the problem from the inside-out." Says Jim Sevier. "Bringing in CNVRG allows for another set of eyes to view the problem from the outside-in. This approach has helped many of our clients and is a BIG reason why we are so often referred."
"Once we sat down and did the math with CNVRG we also found that many of the smaller contractors were not paying their bills at all." Says the business owner. "Working with CNVRG we were able to negotiate extended payments from our suppliers (45 days) and that ensured that we would receive payment BEFORE our debts were due. As for smaller "one-off' contractors, we began a program requiring payment up front. The results have shown immediate improvement in our cash flow resulting a much healthier financial position."
Start a dialogue with CNVRG by sending an email to BeginNow@CNVRG.com