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.