I’m a new small start up company. Have meets with Lowes and Ace at end of month. I believe Lowes terms are NET 90. How does a small company cover manufacturing and supply cost when suppliers are NET 30?
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As well as talking to your bank / getting more investment, talk to your suppliers and customers. NET 90 and NET 30 may be negotiable. You may be able to get better options from suppliers who will see extra business related to the order. If you are selling something very unique, you may be able to get better terms from your customer if their only other option is not getting the item at all. |
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Credit. Factoring. CAPITAL. Intelligence and planning. Seriously. Having enough capital for running your business is part of preparations. If you do not ahve the financials to run your business - you either get them or go bankrupt. One reason many new businesses fail. For manufacturing you can either raise your capital base, or talk to your bank. |
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Keep in mind that your first transaction with a huge firm may take longer than 90 days. They may need you to register with and figure out a 3rd part invoicing site like www.ob10.com, they might have purchasing agents who frag their feet, might have insurance requirements, etc. Get a line of credit if you can, and keep you belt tight until you are in the flow of things.. |
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