Financial Bully On The Playground
(Ben Franklin's Lightning Rod)
While most scientists of his time were trying to fix the lightning problem by avoiding lightning, Ben Franklin took the “thinking outside the box” approach of attracting lightning.
While traditional wisdom says debt-to-equity ratios should be reduced, Kepler Financial does not believe this automatically means we should shrink the asset side of the balance sheet. Selling terms and service may be a more enlighten approach.
Extending longer credit terms, seasonal dating, and more lenient credit underwriting standards can help you to sell terms not price. Wider product selection of brands and sizes, along with fewer back-orders and stock-outs, improves your service profile. Carrying backup inventory for clients with a JIT inventory policy can create a strategic alliance relationship, not just a vendor situation.
You can sell service, not price. This means slower accounts receivables turns, slower inventory turns, and in short, more investment is required. However, the properly-capitalized company can be buying market share with non-price reduction methods.
Having the proper financial partner is the key to this strategy. It allows you to become the financial bully on the playground.