By: Toby Dahm
SVP & ABL Portfolio Manager
Nick put down the phone and sat silently in his chair, basking in the feeling of accomplishment. This is why he formed his business two years ago. This is why he invested in countless hours of meetings with suppliers to get the product right. On the other side, sales, he spent double the time and energy pitching the virtues of his product and why it would be a big hit with the consumer.
Although the road to this point was long, the order came suddenly. After testing the product in 10 stores, Costco became a believer and placed a $2,000,000 order that would be placed in stores throughout the U.S. This is why Nick had started his business. This is why he had gone all in with his money, time and energy. His dream had come true.
The future looked incredible. With Costco alone, he could get to $5,000,000 in annual sales. Wouldn't the other national retailers want to jump on the bandwagon? What kind of sales would he do this year and the next? How big would the company grow? How much money would he make?
As he contacted his vendors with the great news and began to plan for production and delivery, reality hit. This was not only big for Nick, but it was big enough for his vendors that they would not take the financial risk of producing and shipping product without payment in advance. Nick didn't have that kind of money.