Thursday, May 21

Cashflow Crisis Averted

When running a business one of the things you've got to keep a close eye in is cashflow - how much money you have on hand at any one time, and how you expect it to vary over time. This is especially true of a publishing business where you have to pay for the product up front, and don't get a return on your investment until you have sold at least half of your print run.

Things are better this time round. For It's Alive! and Carpe Astra it was the first time I had dealt with those manufacturers so they wanted half the money up front (before manufacture) and the other half upon delivery. Now, since I'm an established customer of Ludo Fact's they are willing to let me pay on delivery. Still, I have to pay before I get any return other than the pre-orders (which are done through PayPal, so I get the money within a week). My first sales to shops and distributors will be on NET30 (they have 30 days to pay) so I will have to pay the manufacturer before they pay me.

The last few months have been a bit quieter than I had hoped, so I've not got enough cash on hand to pay for Sumeria - there will be a small shortfall for a month or so. Where does this leave me?

Yesterday I dressed up smart and popped over to my bank to discuss the options. My business specialist, Helen, is very supportive and also quite excited by Reiver Games as a client, so it's not hard to get my hands on some ready cash if I need it, even in these credit-poor times. Helen's advice was to get an overdraft on my business account, that way I only pay interest on the debt while I need it - they sooner it's paid off the sooner I stop paying them interest (unlike a loan, which always generates interest). There's an arrangement fee, but that's the same with a loan too.

Cashflow is what sinks most businesses. Even a successful business that's in a good position and doing well will go into administration if it can afford to pay it's creditors - i.e. if it runs out of money. It doesn't matter how short this lack of funds is, if you can't pay your debts it's game over. Being on good terms will your bank really helps - a short term overdraft is enough to get Sumeria paid for, and cover the couple of weeks until I start getting paid by my distributors.

In other news, Sumeria has been assembled in Germany and will be shipping on Monday, it should arrive at my warehouse next Friday (29th) - last chance to get 40% off for a pre-order.

9 comments:

Brian Callahan said...

Good Luck with the cash flow!

Where can one find info on Sumeria?

Is this the area control game of dynasties?

How many people can play at one time and how long does the average played game last?

Brian Raymond Callahan
Boston, Massachusetts

Jack said...

Hiya Brian,

Yes, that is Sumeria. You can find info (including the rules) here: http://www.reivergames.co.uk/Sumeria/index.php

Sumeria is for 3-4 players, games last 45-60 minutes.

Cheers,

Jack

P.S. I used to live in Boston, MA it's a great city :-)

Todd said...

You do have another option Jack. Allow those of us who have pre-ordered Sumeria to pay now. It won't make up the entire cost (of course) but several hundred dollars... err euros will certainly help. Let me know when to pay. :)

Rob Bartel said...

Glad to hear you've found a banker that's on your side and it sounds like she's given you pretty good advice. Good luck with Sumeria's launch and the initial wave of reviews!

Jack said...

Todd,

I'd already counted the pre-orders as arriving in time, since the money will clear from PayPal fairly quickly. But thanks for the offer!

Rob,

Yeah, she's great. And thanks too!

Cheers,

Jack

Tao said...

Good luck Jack. I understand completely about the issue of cashflow. Thankfully, it's not as bad as for us; but it is difficult sometimes.

Jack said...

Hiya Tao,

Thanks. Is it too late for me to judge those competition entries? I forgot!

Cheers,

Jack

Tao - Starlit Citadel said...

Nope, go ahead. I was going to announce the winner in June, so it'd be great if you could give me an answer soon.

Jack said...

Hiya Tao,

I've sent you an email via the form on your website - thanks again for the competition.

Cheers,

Jack