“Cash is King”
How often have you heard that phrase?
Do you know the slightly longer version?
“Turnover is Vanity, Profit is Sanity But Cash is King”
Have you seriously considered how relevant this is, if at all to your business? Enigin has.
Consider for a moment a simple example:
Newco recognizes the wisdom of the turnover/profit maxim. It declines the opportunity to expand into huge volume markets where its own limited resources will be stretched so far that their net margin will be pummeled to such an extent that profitability will be slim at best, possibly nil and at worst incur a loss.
Having followed this sensible course Newco devotes its energies to pursuing business with SME organizations (as Enigin often recommends) and builds a healthy portfolio of sound potentially profitable prospects.
Continuing to pursue these leads it begins to convert prospects into customers and realize the kind of margins discussed at Enigin distributor training sessions.
So far so good.
Eager to continue and expand this business model Newco is disappointed when a number of its prospects whilst eager to buy are short of funds. Marching boldly on, Newco decides to offer its solution on credit terms and begins to count its profits. Remember, “Profit is Sanity”.
Still so far so good?
This is a question Enigin had to ask itself in its early days.
Newco continues its pitch. Converting prospects, some as cash sales, others on credit. Of-course to meet its obligations, Newco needs to buy in its materials and services and finds itself stretching its own cash resources to the point where it is no longer able to fund its requirements as they occur. Rather it is waiting on the deferred payment terms it has allowed its “Profitable” customers who were unable to pay.
Now the conundrum. Newco is still attracting good sound SME business that will generate sound margins but is unable to buy in the goods it needs to service these customers.
No goods – no customers.
No customers – no cash.
No cash – no business.
“Cash is King”
Do you have potentially profitable prospects eager to proceed but unable to pay? Talk to your Enigin Business Development Manager about the Lease Purchase options Enigin offers its own direct prospects. There will be similar arrangements available in your territory.
Third party Lease Purchase schemes ensure you are paid on delivery.
“Cash is King”.
