Yesterday I finally sat down with the family and shared my strategy for the business moving forward. Over the last few weeks and possibly a little longer they have been stressed out with regard to our main clients finances and rightly so.
Sometimes you cannot put a band aid on things and the sooner you pull it off the better for all concerned. Our client who is the main reason why we have our business and in my opinion the main reason why they are still in business due to what we have achieved for them with regard to cost savings. If they cannot make it work from here then no one can help them and I do think the writing is on the wall and this is only a matter of time.
This is not the news they wanted to hear but they needed to understand the situation clearly and the solutions that are available. They need to do nothing yet and must continue as they have been until something changes. I have no idea what plans our client has in place and if they will be successful or not. All we can do in the meantime is be aware and be ready to make changes when the time calls for this.
The obvious question is where is the money going to come from to keep us afloat for the next 3-6 months when the transition stage has to take place. Maybe we will not need all the staff, but we are already down to the required number we need to run this business so that s not going to make much difference. The warehouse costs are a must do and there is no problem with that due to the low rent we are already paying. The transport delivery costs will be basically zero while we transition as there should be no stock moving in or out. I would need a budget of around $300K to pull this off and the business should be fine within 4 - 6 months of this transition period starting.
The problem is this client is holding us back and right now I will not invest in our business until this is resolved. They cannot pay us for whatever we manufacture and I am not going to join their list of debtors. If I know waiting a few months means I bypass them entirely then I should rather sit this out.
After this talk they feel a little more relaxed as having a contingency plan in place knowing what needs to happen if the business collapses. I am almost certain it will looking at the numbers our client owes and is more than their entire stock holding value. For this reason alone I will be phoning the owner of this business this weekend. The hope is he will appreciate the call and we can work together taking this forward with some huge changes that need to happen first. This is not a conversation I am looking forward to and why this needs to happen in person and not over a phone, but more of the call being about setting up a meeting.
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