7/24/09 -Solve Your Cash-Flow Problem to Stay in Business

Business Week - July 24, 2009, 10:04AM EST

By George Cloutier

Editor's note: This is the first in a new series of case studies about business turnarounds. Names and identifying details of the company used as the example have been changed.

Problem: The Cash Cow Is Dead

Hot & Cold Inc., a plumbing and heating supply company in the heart of Virginia's Shenandoah Valley, is headed for the slaughterhouse. As the housing boom grew, so did sales, from $7 million a year to $14 million over four years. But as the company expanded, its problems multiplied, and no amount of sales could cover the warts. As the economy faltered and poor management continued, revenue started dropping by more than $2 million a year. There were no easy sales to be milked that would carry the company through to the next quarter. Instead, it has been leaking hundreds of thousands in profits and cash. ...





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The SUNY Canton Small Business Development Center at Clinton Community College is funded in part through a Cooperative Agreement with the US Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA.