Bruce runs a small sporting goods supply business that acts as the middleman between retail shops and manufacturers. His biggest sellers are sports jerseys and the latest in basketball sneakers, so he always has plenty on hand. Over the past few years, Bruce has noticed that his business has been growing quickly and he has done his best to keep up. But in the past few months, the skyrocketing success of the sporting world and the effective marketing of his retail clients has meant that Bruce’s sales have almost tripled in a short period of time.
As Bruce has tried to keep up with demand, he has noticed a domino effect that has started to cause problems. For one thing, he does not have credit terms with every manufacturer and he is finding it harder and harder to keep up with orders. Another problem is that Bruce’s increase in business has allowed him to become a gold level client for many of his manufacturers. That means lower prices and better profit margins for Bruce. But if he does not maintain his purchasing levels, then he will lose his gold status and all of that extra profit.
Bruce’s Problem Is Not Unique
One of the biggest myths about business is that success is a great thing, no matter what form it takes. When a company’s success starts to outpace its cash flow, then that success can cause more problems than it solves. In Bruce’s case, he needs to turn his invoices into cash immediately just to keep up with demand.
The problem is that his customers have this habit of paying their invoices on time, but not early. That leaves Bruce stuck with trying to figure out how to keep his business growing without going bankrupt at the same time.
Invoice Factoring Helps Growing Companies To Enjoy Success
A big hurdle that Bruce faces is that the bank is unable to offer him any further funding. But Bruce is told about invoice factoring and he realizes that he has found the way to enjoy his success and keep his business profitable.
A factoring company will have an account set up for Bruce in a matter of days. Once the account is set up, it only takes a few hours to turn an approved invoice into cash. The cash goes right to Bruce’s bank account and the cash keeps flowing just so long as Bruce has invoiced sales. Since getting invoiced sales was never an issue, Bruce finds that invoice factoring is the ideal solution.
Invoice Factoring Professionals Know Your Industry
One of the things that Bruce liked the best about setting up his invoice factoring account was how well-informed the factoring company was about his sports apparel business. The factoring company was well aware of the different tiers that sport apparel manufacturers use and that allowed the factoring company to create a plan that helped Bruce to retain his profitable gold status.
The factoring company also understood the issue with having to pay some vendors in cash. After a few months of utilizing an invoice factoring company to sustain his cash flow, Bruce was able to get credit terms from many of those manufacturers and he was able to expand his business even further.
Factoring Allowed Bruce To Address All Of His Growing Financial Needs
With his cash flow stabilized by invoice factoring, Bruce was able to hire the extra employees he needed to meet demand. He was able to meet payroll every pay period, pay his vendor bills on time and he was even able to start planning for an expansion to his warehouse.
The steady cash flow also allowed Bruce to invest in a more efficient inventory system, new equipment for the warehouse, and a few new trucks. Invoice factoring eliminated Bruce’s daily cash problems and allowed Bruce to work closely with his bank to put together funding for his company’s future.
Introduce Your Growing Business To Invoice Factoring
The story of Bruce and his company happens on a regular basis in the corporate world. The successful outcome of those stories depends on what actions the business owners take to meet their business needs.
If your business is growing so fast that you are outpacing your cash flow, then call on an invoice factoring company to stabilize your cash position. You have worked very hard to realize success and you do not want that success to put you out of business. Work with your bank to prepare the funding for your company’s future, but work with a professional invoice factoring company to make sure that the cash you need on a daily basis is always available to pay your bills.