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    6 Replies Latest reply on Jun 18, 2008 4:24 PM by FactorGirl

    Working Capital Issues

    ahirestaff Wayfarer
      Our company has made a profit every year for the three years that we have been in business.
      Our annual sales are in the 100 million range. We have used all of our personal resources for working capital (credit cards, mortgage loans, ect.) and we are running out of options. We do not want to sell our invoices and we have very little personal collateral left. Last year we were approved for a 30K capital access loan, but that was not enough money to resolve the cash flow problems. We are currently billing about 80K + per month.
      If anyone has any helpful options we greatly appreciate it.
        • Re: Working Capital Issues
          Lighthouse24 Ranger

          If I'm interpreting your numbers correctly, you're operating at about a 1 percent margin -- which sounds terrible, but that's where Kelly Services reportedly is, too. Without knowing any details of your business (other than the workers comp issue in your other post -- which is clearly cutting to the bone), I'd guess that your operation is focusing too heavily on placing unskilled and semi-skilled (low margin) workers, and not nearly enough on mid-range positions ($10-$20 an hour). Individuals who have sought-after skills -- and the companies that want them -- are pretty much meeting on websites. I honestly don't understand why more staffing agencies aren't tapping into that business. I'd think those types of placements could clear you as much as 7 percent, so increasing them by as little as five percent of your total placement volume could produce another $40K a month (again, assuming I'm interpreting your numbers correctly). Perhaps it's not that simple, but based on the info you posted here, that's what jumped out at me right off. Hope it helps.

          1 of 1 people found this helpful
            • Re: Working Capital Issues
              ahirestaff Wayfarer
              Thank you for taking the time to respond.
              Our company focuses on finding quality candidates on a temp to hire basis.
              We do hire skilled employees at mid ranged wages. You are correct, we make a higher profit on the positions that pay more per hour.
              I created a formula that tells me what our profit is per week and per month. I can see how much money we are making on one person working 40 hours a week, making 15 per hour - after overhead, workers comp., taxes, ect. We are generating a profit every month and have been for quite sometime.
              As our companies takes on more clients we are increasing the overhead and amount of money that is paid out for insurance, ect. but we also generate more profit. The profit is constantly used to cover the clients that don't pay on time.
              What I can't understand is why it is so hard to maintain a business such as ours. It seems like unless you have loads of money in the bank to cover payroll when your clients don't pay on time, you are struggling.
              If I had a solution to our problems, I would be all over it!
            • Re: Working Capital Issues
              gailaugust Newbie
              ahirestaff, I have a similar type of business and had the same problems that you did. I have reently been able to resolve them however and we are breathing much easier these days. email me at and let's see if I can help.