How an INC500 Fastest Growing Company Survived Missing Payroll
This Article illustrates the true story of how one of the owners of Financing Solutions needed its own services of providing funds back when the owner was building another company.
It was 2005 and we had gone from $1 million in sales to $3 million to $5 million to $7 million in 4 years. We had done everything right. We had been around for several years and we were prepared for this growth spurt. We had started our business years ago using a Factor and got off the Factor in 18 months due to its expense. We then self funded ourselves for a few years until we lined up a line of credit with a bank just in case we needed it. We made sure we understood our cash position, our growth and our profitability. We had the right advisors. We had the right employee’s. We were at the right time with the right services. There was nothing better in business then to be the owner during this incredible growth spurt.
And then it hit us all of a sudden. Our team had really had a dynamite month and it caused our sales to almost double. I had talked about getting our line increased at the bank but hadn’t approached the bank yet because I felt I had plenty of time. My mentor explained to me that with our sales and profits, the bank would have no problem increasing our line so when I made the call to my bank fund officer, he shocked me when he said that it would take him 60 days to increase the line. I felt dumb. I always considered myself a well prepared business man, a business man who plans.
I was in the temporary employment business and missing payroll for a staffing company is a death sentence. Miss payroll and the people you have on billing will quit, Client companies will stop working with you, and your internal staff with start looking for another job.
There was no one I knew who could fund me $60,000 and I needed it quickly so I made the call to my PEO ( Professional Employer Organization) who processes my payroll and I told them what was about to happen. They offered to fund me the money until I could get my problem solved. In 45 days I paid the PEO back and extended my line of credit with the bank. I never missed the payroll, my employee’s never new what almost happened, and we went on to be an INC500 fastest growing company in the US.
Over the next 18 years I went on to start 4 more successful companies but I never forgot the feeling that July month when I thought I was going to miss payroll.
Who knew that year’s later, I would build on that experience, and create Financing Services (www.payrollfinancingsolutions.com) to specifically fund money to companies that needed a short term fund when no other options were available so they could meet payroll.
Financing Solutions (www.payrollfinancingsolutions.com) provides fast business funds of $5,000-$100,000 to good small businesses with sales of $500,000-$7 million that can be used for working capital.