Cash Flow Management Techniques in Action

I saw this article on Entrepreneur.com. As a strong advocate of diligently managing business cash flow, and a believer that you can solve most issues if you identify them and confront them…and think creatively, I liked this article because it’s about a small business owner who did just that. She encountered problems but then put some cash flow management techniques into play. The article is about a tiny business but the concepts apply to much larger businesses. – T. C. Wright

How a Microbusiness Rebounded from the Recession

A fashion startup survives cash-flow problems and redesigns itself for a comeback.

Warning signs were few for Rose Corrick. In summer 2008, sales at her women’s apparel company, Art of Cloth, hit their highest levels ever as more boutiques added her hand-dyed textile fashions. Preparing for big growth, she even signed a lease in October 2008 to move the company’s operations from her basement to a 4,500-square-foot warehouse. Little did she realize the timing could not have been worse.

oon after signing a three-year lease on the new space, the U.S. economy began its nosedive and cash-flow problems followed. About 15 upscale clothing boutiques – scared by the headlines and struggling themselves – canceled their orders in October and November 2008. Art of Cloth had already custom-made the clothes, so the cancelations resulted in about $30,000 in lost revenue. While stores technically weren’t allowed to cancel, the company had little legal recourse and didn’t want to upset its loyal customers.

Finish reading the article on Entrepreneur.com.

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About Tiffany C. Wright - The Resourceful CEO

Tiffany C. Wright is the author of “The Funding Is Out There! Access the Cash You Need to Impact Your Business” and “Solving the Capital Equation: Financing Solutions for Small Businesses.” She is the founder of The Resourceful CEO, which helps owners of small/medium-sized businesses prepare their businesses for sale. Tiffany has an MBA from the Wharton School of Business, sits on non-profit boards and serves as a business mentor with the Cherie Blair Foundation.
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