We always try and help clients help themselves through self examination of their existing Cash Management, before approaching external sources for new finance.
This particular manufacturing client (they still exist!) had the usual “dead” stock which whilst in good condition was ageing:
Rejected samples for large prospective orders
End of lines
The product which was traditionally directed at the Commercial and Public sector Specification market, had never been sold to the Consumer or SME market, although it was highly relevant to it. Avocet therefore recommended turning the existing Showroom into a Factory Showroom with connotations of “bargain” but “professionalism” and investigated all planning and Health & Safety constraints, credit card facilities, media options & prepared a detailed Business Plan. It also recommended advertising on the “Web” where apart from the inevitable eBay there are other rewarding sites. The company made a 50% gross margin selling to its traditional markets at 50% off list. By selling at 75% off list the Consumer/Owner Manager thought they had a free lunch whilst the client was selling at cost. The client has adopted the proposals & early weekly sales are now settling at £4000 with nil extra staffing.
Always think outside the box
Think of non traditional markets for excess product
Decide whether you are running for profit or cash