Read on Twitter
So I’m pretty quiet on here but I thought I would try to get out of my comfort zone!
This will just be a thread about the things I’ve learned about and things I’m still figuring out:
This will just be a thread about the things I’ve learned about and things I’m still figuring out:
(1/x) So for the past year, I’ve taken on the financial planning responsibility of an established D2C business that had experienced decent growth YOY. 2020 was more that decent, it was triple digits growth!
(2/x) This sounds great at first, but for a bootstrap business, this can be frustrating at times and requires precision cash flow management to sustainably grow your business.
(3/x) When thinking about the D2C financial model, 3 components come to mind: vendors, banking (trad. and non-trad), and sales channels. This is basic stuff but how you approach each one and use one to help the other has helped us not become financially static.
(4/x) Vendors:
Your ultimate goal with your vendors is to build the best possible one on one relationship. When times get tough, having the ability to receive an extension on terms is incredibly helpful when AR is delayed. Plus, it’s just more enjoyable to work with them
Your ultimate goal with your vendors is to build the best possible one on one relationship. When times get tough, having the ability to receive an extension on terms is incredibly helpful when AR is delayed. Plus, it’s just more enjoyable to work with them
(5/x) Banking:
When possible, try traditional banking but more than likely, you will have to go non-trad. Big & local banks still have a hard time understanding how the internet works and they don’t want your “thousands” of units as collateral.
When possible, try traditional banking but more than likely, you will have to go non-trad. Big & local banks still have a hard time understanding how the internet works and they don’t want your “thousands” of units as collateral.
(6/x) Banking cont.
Trad. banks have a hard time keeping up if you are doubling in size every 2-3 quarters. So here are some of the non-trad. financing options we like: Shopify capital (top choice), http://settle.co , and @clearbanc. I’m interested to hear about any others!
Trad. banks have a hard time keeping up if you are doubling in size every 2-3 quarters. So here are some of the non-trad. financing options we like: Shopify capital (top choice), http://settle.co , and @clearbanc. I’m interested to hear about any others!
(7/x) Banking cont.
Non-trad. banking obviously isn’t as competitive with rates as your local bank, but the difference between having access to capital and not will put a halt to your growth.
Non-trad. banking obviously isn’t as competitive with rates as your local bank, but the difference between having access to capital and not will put a halt to your growth.
(8/x) Sales Channels
This has been the cause of cash flow problems and the solution. Your business should be Omni-channel for several reasons: greater exposure, resistance in market fluctuations, and so on. When the world took a wrong turn in 2020, we were ready when people were
This has been the cause of cash flow problems and the solution. Your business should be Omni-channel for several reasons: greater exposure, resistance in market fluctuations, and so on. When the world took a wrong turn in 2020, we were ready when people were
at home and when they were ready to get back out and shop! So it’s a must to find new sales channels for your business.
(9/x) Sales Channels Cont.
With new channels, comes new payment terms. What is hard for a D2C business to cope with is the minimum 30 days to get paid on an order. It’s worse when you realize it could be 60, 90, or even 120 days from purchasing to payment!
With new channels, comes new payment terms. What is hard for a D2C business to cope with is the minimum 30 days to get paid on an order. It’s worse when you realize it could be 60, 90, or even 120 days from purchasing to payment!
(10/x) Sales Channels Cont.
What I have found to be successful for managing these long periods of outlying cash is using your “next-day” payout sales channels to “fund” your operations. This can only go so far but understanding channel cash requirements can help you plan
What I have found to be successful for managing these long periods of outlying cash is using your “next-day” payout sales channels to “fund” your operations. This can only go so far but understanding channel cash requirements can help you plan
Your other channels.
(11/x) I know there is much more to cash flow management (inventory turnover, employee time management, etc) than what I just mentioned but these have been the biggest components for me the past year.
(11/x) I know there is much more to cash flow management (inventory turnover, employee time management, etc) than what I just mentioned but these have been the biggest components for me the past year.
(12/x) Also these points may be abundantly basic for some but I’m just getting started on Twitter lol. I’m interested to hear from other D2C businesses on how to combat cash flow issues and good financial practices you have found to be successful!
