Follow the Money

Options for fixing your revenue stream.

What are you doing differently this year?

Is your topline growing? Is your slow-moving inventory number shrinking? Are you attracting new clients while defending good existing ones? Is your cash position improving? Or are you stuck in an EMS/OEM mud pit?

Will 2024 be business as usual? Where will you get your inspiration to improve your business, from the inside team you’ve assembled or from an outside third party?

Sometimes inspiration comes from the most unexpected sources. I lack an engineering degree, but am part of a patent. Years ago, I solved a design issue as our time to prove a concept entered the final hours of our quest. The inspiration came from simply looking at my wife’s tiny rock jewelry box and how the lid interfaced with the body of the box. Our engineers were blown away that the head of sales and marketing helped solve this difficult engineering design problem. (For what it’s worth, so was I.)

Many companies I have spoken with want to grow organically but have no sales or marketing presence. How can a poor market awareness of your company and zero investment in those disciplines result in doubling your company? News flash: it can’t.

You want to sell your company or buy an add-on business. How do you do that without a plan and experienced help? How do you assess your prospective buy without having done this before, especially if you represent a private equity firm with no real manufacturing services knowledge?

Can you improve the inventory/cash situation if you have numerous poor-paying customers that impose unreasonable demands on you just because they think they can. Do you wait too long to send a show cause letter out of fear it may send a “bad message” to your other clients? Do you fail to take legal action once that letter is ignored? It is my experience that poor-paying OEMs do this out of necessity (read: survival) or a crappy culture that hops from one manufacturer to another. It is rare you can “fix” these situations by buying them dinner, continued pleading, and resending undeniable proof of payments that are due.

Every turnaround I’ve been a part of started out by me following the cash. Make sure top leadership assumes responsibility for receiving undisputed payments. Don’t just leave it to the A/R clerk and program manager. Make calls and visits to the OEM leadership and set a mutually agreeable payment plan, or you can decide this won’t change.

Jake Kulp is founder of JHK Technical Solutions, where he assists OEMs and EMS companies with optimizing demand creation offerings and deciding when and where to outsource manufacturing. He previously spent nearly 40 years in executive roles in sales and business development at MC Assembly, Suntron, FlexTek, EMS, and AMP Inc. He can be reached at jkulp@cox.net.