Take This As The First Win For Now
When you cannot grow your business through leads or prospects then what do you really have? A business that cannot grow and is only surviving. This new client is only worth around $500 per month, but it is still a win for now.
In late February 2020 when we shut down our warehouse operation in Johannesburg I never knew how bad things were going to become. Business has been on slippery slope ever since holding onto key clients and letting others go who were deemed a high risk. One bad customer can take you under and we have been ultra careful as the protecting what we had was the goal.
Yesterday was the first order with a new client we have manufactured and delivered almost 28 months later. That is crazy to think as we have turned away so many potential clients looking for stock over that period.
The madness is things haven't really improved as the supply chain is still very restricted. The problem lies in the raw material as they are just unobtainable or are available at a premium sucking all the profit so it is just not worth the hassle.
If we need 40 tons of raw materials then we have to now order 100 tons and pay up front. We then wait for delivery and if we are lucky will receive half and then wait for the credit to reflect in the bank account. Not ideal as this sucks up large amounts of cash flow and is always on the suppliers terms.
This is why we have had to be so careful and any new client is cash only before goods are delivered. In the past we have had a truck load of manufactured goods sitting outside a clients premises waiting on payment and that order fell through as no payment was forthcoming.
Pricing is hard to keep up with as next month there is another $0.25c kg increase in raw materials. Two years ago the raw material was around $1.20 kg and is now nearly double at $2.25kg and still increasing. What we use is virgin polymers which is a bi product from crude oil so are heavily affected by the local currency value along with the imported prices of crude.
Still it is what it is and we have to make do with what we can even though I refuse to add the clients I have worked so hard on and put on hold as the risk is too high. The risk of losing them forever through letting them down is not something I am prepared to do as their volumes are just that high. Fortunately they respect my decision for now as my relationship means more than the business. We are talking about serious money basically being thrown away each month and there is nothing we can do.
Still having one smaller new client added to the monthly orders seems like a small win which we must celebrate for now. The sad thing is we could do so much more if we weren't restricted by what can be manufactured.
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I think that you and your buisness are not alone with this current problem. It sounds very stressfull and also like a very difficult balance between generating new customers and keeping your old ones.
What kind of products do you ship if I might ask? It is very interesting to me what other people on Hive are doing in their "offline" time :D