Originally Posted by
mother
My biggest fear the last couple of months has been cash flow... When I "retired" from the corporate world 4 years ago, I used my pension to start up my business, and I had enough savings to keep me (personally) going for 3 years. My business' setup costs have been high, and a lot of our expenses to date have been on R&D (very necessary, since we're in unchartered waters). The last couple of months I've had no choice but to draw a salary, even though we haven't reached the turnover target where the business can afford to pay me. This in itself wouldn't have been disastrous, if our debtors' payments were up to date. And I can assure you that the current economic climate is NOT the reason for debtors' non-payments. The debtors that are taking up to 90 days to pay a COD account, are the affluent ones, not the middle class ones. In total, we have over 1 months' turnover short in overdue accounts. THAT is disastrous! So right now I fear that if our cash flow problems continue, it could result in us not being able to pay our salaries, or force us to close our doors.
The biggest threat in our business, is the fact that I am the business. This will only change once we have grown big enough to warrant employing more head office staff (i.e. managers to take over specialist functions, a buying office to take over sourcing and a designer to feed the factory and customers).
What gives us the most problems? Admin. Since admin is not an income-generating function, it moves to the bottom of my pile every day. But the lack of good admin results in inefficient management and time wasted.
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