I am working with an owner who sells high end bicycles for kids. He has designed each bike by hand and has developed a strong brand just through word of mouth and referral advertising. He had an accountant he was using, but that person was just focused on making sure the information was good enough so the yearly tax return could be completed. The owner knew he needed more – his business was expanding quickly and he needed a plan for growth.
Since his bikes were manufactured outside of the US, the lead time to receive inventory was almost 3 months. He needed a good forecast of sales so that he could order inventory and make sure he had the financing he needed to pay for the shipments – cash flow was very important.
After sitting down with him and learning about his business, I first reviewed his financial information and made changes in how he tracks his financial information so it is easier for him to understand. Next, I took his sales data and mapped out where his customers were purchasing his bikes across the US. We saw there were several areas with a higher concentration of bikes sales. He is now focusing his marketing and outreach efforts in these areas to build upon the strong word of mouth presence he already has.
I then created a financial plan for the next 2 years, organized by month, that shows projected sales for each type of bike he sells. Now that there is a sales plan, he can work with his manufacturers to make sure he has enough inventory to meet expected demand and work with his bank to make sure he has the financing he needs to support his business growth.
I am continuing to work with him as he grows to develop a proper inventory management system as well as working to determine the right time to hire his next employee. He feels much more confident on the path to growth and he has a plan to manage his cash flow over the next 12-18 months. I am excited to continue working with him and guide him as he pedals to success!
Eric has over 25 years’ experience in small business, startup, and large companies and has held numerous roles focusing on business and financial strategy in businesses. He is currently the CEO and Owner of EDGe Business Planning. EDGe works with small business owners to help them understand their financial and business information and use it to grow their business profitably. Contact us at firstname.lastname@example.org.