What is Bookkeeping? Bookkeeping is the recording of daily transactions that cyclically follow a defined process. Bookkeeping breaks down into parts such as Accounts Payable,
Cash Flow Management For An Entrepreneur’s New Product Line
Ideas for a new product line
A client called me with their ideas for a new product line along with the statement, “We are going to sell widgets to all the widget providers, and we aren’t going to focus on the direct sale anymore.”
Considering this has been the company’s core business, I took this idea in and said, “interesting, and how are you going to cover the time it takes to get this new endeavor off the ground?” Considering that I manage their cash flow management and vendor relations, this is a very personal topic. Also, considering that the cash flow is at a trickle these days, any delay in payments could be devastating for this particular CEO.
Balancing the needs of the business and the needs of growth are two very different disciplines.
This scenario does pose a fascinating balance and battle of wills between the entrepreneur and the CFO’s role. Balancing the needs of the business and the needs of growth are two very different disciplines that are so intertwined it’s often difficult to separate the two and find the balance.
The traditional CFO will tell you that the Cash Flow Projections don’t have room for this type of pursuit. They would be right too. However, as I have found with entrepreneurs, “no” is not an option. So my challenge and fondness for entrepreneurs; brought me to find the way to say “yes, if we do this….”
From this particular mindset of “yes, we can if,” the power of the team of the entrepreneur and CFO becomes a powerful, forward-moving machine focused on growth, improvement, and profitability. Also, having a CFO who is also an Entrepreneur at heart doesn’t hurt either!
What we did in this scenario is work with the CEO to prioritize how we went to market. First, we identified potential clients. Next, we paid down the vendors we would need to support us. Then we started an email and phone campaign to contact all the potential clients. It was slow at first, but the orders began to come in.
Clients aren’t the only ones that make our business possible.
The essential things we addressed upfront were not spending marketing dollars that weren’t in the budget and not forgetting the suppliers that we would need to support us, or in other words, the relationships that we have built over time.
That leads me to another thought; clients aren’t the only ones that make our business possible. Vendor or supplier relationships can break the company faster than a lost client, but that’s a topic for another blog post.
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Have you said of these things before? I’ve changed bookkeepers five times in the last few years. I just can’t seem to get the financial