Even for the very best of sales people, in today’s market, getting retail shelf space is a massive challenge. While big box stores and major retailers may once have considered purchasing from start-up companies and small businesses, in today’s market, the answer is almost always a resounding “no.”
Fortunately, “no” can always change to “yes” in time, and the best way to get to “yes” is to build up a positive track record of great sales. An October 2010 New York Times “Small Business Guide” article cites small, local businesses and area-specific chains as the ideal places to market new products, and for good reason. Small businesses are more likely to help other small businesses. The owners may even know you or someone on your staff, helping with the proverbial foot in the door. In addition, smaller companies have more autonomy to make buying decisions, making it more likely you’ll get to “yes” faster by staying close to home.
Of course, once you get that first big order, you need the operating capital to actually fill it. For example, your company, Chili Mania, sells Matt’s Homemade Chili Sauce, and your local grocer agrees to carry it, purchasing one case. Sales become steady, and the grocer carries it for a few months, buying one case at a time. At this pace, your overhead is relatively low, and you are able to meet the grocer’s needs easily. Unexpectedly, you receive a new order from the grocer for five cases. At the same time, a competing grocer has been receiving customer requests for Matt’s Homemade Chili Sauce, and orders two cases for each of his three stores. Suddenly, you’ve gone from one case a month to needing to produce 11 cases immediately. And, ideally, this increase in business will continue as word spreads about your great product. This is where accounts receivable factoring can help.
Seeing your product catch on is an exciting time and a great opportunity to get ahead. How you handle your small business financing, however, can make as big a difference in your success as your order volume. Increased overhead such as new production costs and payroll expenses can strain your budget as you produce the goods to fill your customers’ orders. And once you deliver the product, you’ll most likely wait anywhere from 30 to 90 days to get paid.
At this point, many entrepreneurs look into small business loans, only to find that their lack of business history, spotty personal credit, or inability to produce adequate collateral makes the weeks they spend in the application process completely fruitless, as they are repeatedly denied loans. Small business financing through accounts receivable factoring, however, is much more accessible.
Fast A/R Funding provides invoice factoring services to small businesses just like the chili sauce company in the example above. Chili Mania saw its orders rise, and that would be the ideal time to apply for invoice factoring services.
Because Fast A/R Funding bases approvals on your customers’ creditworthiness and your invoices’ values, funding through invoice factoring is much more accessible than a small business loan. In as little as 48 hours, we can provide the funding you need to fill those make-or-break orders. And because we help manage your accounts receivable and credit risk, you can focus on building your business instead of billing your new customers.
For more information on how your business can benefit from accounts receivable financing, contact Fast A/R Funding at info@fastarfunding.com or call 888.833.8826 today.
Disclaimer: The information presented above is general and intended for educational purposes only. It is not a substitute for practical legal or accounting advice on any specific situation.
