Money Matters 9/6/2010 2:46:00 PM 
When it comes down to it, you're in this business to make money. Right now, for many of you that is easier said than done.
While down in Atlanta last week for IWF, I had a number of conversations discussing the current state of our industry. One conversation that sticks out in particular regarded problems dealing with banks. Many woodworking companies are having problems with banks taking away their line of credit. On top of that, material and component suppliers are requiring a portion of the cost paid up front. Without the cash up front, those suppliers are unable to get the materials you need. Taking away available credit is like knocking down the first domino. Everyone is affected by this problem.
Dave Grubb and I then discussed the topic at length and as a result this week Dave's blog deals with this very subject matter and in his next one he'll go into even more detail on what you can do to work around the problem. One thing is for sure, communication is key in this situation. Communicating your situation, honestly, to your bank and your supplier partners is crucial. Trusting relationships are important during tough times. Dave’s blog does a great job of pointing on some areas where you can gain the trust of your bank and prove to them that your business is worth the risk.
What are some of the issues that keep you up at night? Is money your biggest concern for your company right now, or are there smaller details that occupy most of your time? Use the comment field below to leave your answers. I’d love to hear from your biggest challenges are right now and if you have found solutions to those problems.
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Comment on this story
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New Comment
Created by Scott on 9/8/2010 1:30:17 PM
Line of Credit and New Orders is what is keeping me up at night
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need a job
Created by david on 9/7/2010 4:41:46 PM
Anybody out there looking for a good finisher, please e-mail at dbandy10@Yahoo.com
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Pretty much
Created by Brian on 9/7/2010 3:30:21 PM
I think you have uncovered the main problem most of us have face for the last year. Income is down enough to cause for late payments or missing payment to suppliers, banks, ect. In commercial casework, most of the jobs left are either Government (less all the time) and Medical. General Contractors are predicting between 18 and 48 months for the economy to recover. Far too long for most shops. What will happen is with this shortage of work, the financially and niche weak shops will have to close up leaving more work on a smaller pie for everyone that's left to share.
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New Comment
Created by Anonymous on 9/7/2010 3:12:34 PM
New Comment
Credit is certainly a problem as well as cashflow. It does cause sleepless nights.
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Prod Mgr.
Created by Norm on 9/7/2010 2:21:20 PM
The cash flow/credit lines/vendor deposits are all making a bad problem, worse. One resolution that we have been able to work out is a personal guaranty instead of deposits. It's a death spiral for some, customers going out of business, so deposits are required which helps to drain cash and more of the customer base goes down. Deminishing credit in a society and business models that rely on credit being available...... There are few happy endings here.
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