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COMPANY #1
- Food & beverage industry
- Manufactured & packaged juices
- In business 7 years
- Worked closely with one of Australia's largest juice company
- Supply agreement worth MILLIONS
Thread
- Food & beverage industry
- Manufactured & packaged juices
- In business 7 years
- Worked closely with one of Australia's largest juice company
- Supply agreement worth MILLIONS
Thread
Key Takeaways: (summary)
- MONEY IN: only focus - without inflow, nothing happens
- PRESSURE: learn to handle the heat
- OUTSOURCE: use it to leverage better agreements
- YOU'RE #1: pay yourself first, keep the company breathing
- PREPARE: for the worst
- MONEY IN: only focus - without inflow, nothing happens
- PRESSURE: learn to handle the heat
- OUTSOURCE: use it to leverage better agreements
- YOU'RE #1: pay yourself first, keep the company breathing
- PREPARE: for the worst
So what went so wrong? (summary)
1. Under-capitalisation of trading activities
2. Inability to hold business relationships
3. Poor strategic management
4. Premature outflows
5. Coronavirus
Full explanation
1. Under-capitalisation of trading activities
2. Inability to hold business relationships
3. Poor strategic management
4. Premature outflows
5. Coronavirus
Full explanation
1. Under-capitalisation
Cash-flow wasn't enough to keep up with expenses. Even though there were solid contracts, expenses were just too high. Strategies were adopted, such as paying employees cash, but still financial issues ensued.
Cash-flow wasn't enough to keep up with expenses. Even though there were solid contracts, expenses were just too high. Strategies were adopted, such as paying employees cash, but still financial issues ensued.
SOLUTION: only focus on getting MONEY IN. You do not need pay for a fancy back-end to administrate and track sales. It is a waste of time. Unless it will lead to more sales then yes, but with only a few large clients, it is useless.
2. Inability to hold business relationships
Production occurred in another company's facility, however they couldn't pay the invoices. So they came up with an agreement to sell the company for millions later and offset the debt. The director couldn't handle the debt pressure.
Production occurred in another company's facility, however they couldn't pay the invoices. So they came up with an agreement to sell the company for millions later and offset the debt. The director couldn't handle the debt pressure.
SOLUTION: keep your cool. You must be able to handle the heat in any aspect of business. When things get hot, find cold water, insulate yourself. In this case renegotiate, find more clients. Do not wait for nothing to happen.
3. Poor strategic management
The company had it's own proprietary machinery, but needed external assistance. It overpaid in it's operations.
The company had it's own proprietary machinery, but needed external assistance. It overpaid in it's operations.
SOLUTION: outsource when possible. Do not pay a premium when the job can be done cheaper with the same quality. If you lack the equipment... talk with as many people as possible to fix it. Never go to the best and most expensive company first. Leverage our quotes for deals.
4. Taking MONEY OUT when it's not time
The company had a director loan of $1M+. He loved paying himself, but didn't put back into the business enough. He though just showing up was enough, as an OWNER. He felt good paying himself well, but now has NOTHING. 0 assets.
The company had a director loan of $1M+. He loved paying himself, but didn't put back into the business enough. He though just showing up was enough, as an OWNER. He felt good paying himself well, but now has NOTHING. 0 assets.
SOLUTION: reinvest into the company. ALWAYS pay yourself first, while ensuring the company remains afloat. Don't mistake company money as your own money.
5. Well, not much to say here other than the company wasn't flexible and resistant to economic pressure. People still drink juice, and that juice needs to be packaged.
SOLUTION: treat each day as through you are preparing for the worst. You never know, tomorrow may be game-over.
SOLUTION: treat each day as through you are preparing for the worst. You never know, tomorrow may be game-over.
