By Andy Siemer, CEO
How many things does it actually take before a business stops running on duct tape and bailing wire?
Marcus is the client from "I definitely wouldn't start there." A month into working together, he came back with the problem underneath everything else. Not the old ERP system he'd wanted to rip out first. Cash flow. Roughly two-thirds of his receivables were sitting past 30 days, a third of that past 90. To cover the gap between doing the work and getting paid for it, he'd cashed out his own 401k more than once, just to make sure payroll cleared.
We told him how we'd fixed the same problem at Inventive — invoice factoring, reserve accounts and all — because we'd sat on the wrong side of that gap ourselves. We walked him through how a factoring line actually gets structured, what a reserve account is for, why you only factor the invoices that are going to pay. We'd had the exact same problem, so we handed him the playbook we used on ourselves.
So what surprised Marcus more than the factoring did?
He'd walked into our very first call expecting to check five or six things off a short list he'd already made in his head. Reasonable list, too. The stuff you'd expect a business owner to flag when a new team starts poking around his systems, and probably about what most of us would come in with if somebody asked us the same question cold.
What he didn't know is that while we were talking, our team was also tracing the conversation itself, mapping the money as it actually moved through his systems rather than where he assumed it moved. That's the first artifact on every engagement we run: the data-flow map. It's a record of what's really happening as the money moves, not a features wishlist, built while the client is still on the call, corrected as he talks instead of guessed at afterward.
The list that came back wasn't five or six things. It was sixty-seven. Sixty-seven items is more than most people's calendars can hold in a month.
"...I had five or six things I wanted to check. He goes, all right, so we have identified 67 things that you need. And I was like, that's actually probably more accurate."
That's Marcus's own read on it, and the interesting part is what he did with the number. He didn't push back on the number at all. He said it sounded about right. "We have literally just kind of held it together with duct tape and bailing wire," he told us. He didn't read sixty-seven as inflated. Nobody had ever actually counted for him before.
My assumption is most people read a big number as a sales tactic. I read it the other way — a padded list doesn't survive the client's own eyes, and Marcus didn't blink at his. Correct me if I'm wrong. What the count actually did was show him the whole shape of what was leaking before anybody picked where to start. You have to know everything that's on the list before you can decide what's worth touching first — that's really all the count is for, and it's the same discipline behind not starting with the biggest, most obvious item on it.
And it compounds from there. Fix one leak, and then another one shows up in its place, because that's just how a business runs. Whatever's loudest gets all the attention, and something is always loudest. The goal isn't getting to zero problems, because you never get there. Every fix just frees something up. The way I've put it to clients before: "you're either keeping more profit in your company from existing revenue, or you're enabling your ability to go get more revenue." Neither one happens if the thing that's leaking never gets named.
Sixty-seven is just the count of places where profit is currently trapped, ready to be worked in order, starting with whichever one is loudest today and moving down the list as each fix frees up the next one. Marcus came in expecting a short list. The count just had to happen before anybody picked what to fix. That's the order it has to go in, too — you can't count something accurately in a first meeting that only checks the five or six things you walked in already knowing about.
First pass is a data-flow map we build while you talk — you'll correct it before we count anything. Start the conversation.