What we’ve been up to… Part 3 – Funding

Of all the issues we had to deal with cash flow was the most critical and also the strangest to explain. People not familiar with scaling a venture or business in general tend to ask, "how can you guys have money problems if the business is doing so well?"  A fair question. Interestingly enough cash flow problems are probably the number one killer of fledgling businesses.   The income statement and balance sheet can look great, with good margins, solid business model and strong customer base to boot, yet a company can still find itself in a heap of trouble.  In the case of Henge Docks, we built our financial projections based on 2 month inventory cycles, not weekly.  The longer cycle would have allowed us to reinvest the cash generated from sales and build out our product lineup in a linear fashion, an admittedly conservative approach. We were faced with the good problem of needing to secure an additional round of funding to crush our cycle time down as short as possible and purchase as much inventory as the factory can produce. The issue goes further down than just the dock assembly process, we've made investments in large quantities of the accessory hardware and even the plastic resin used to make the docks themselves. This way we can smooth out fluctuations in the supply chain and cut back the lead times on our reorders. The second round of funding has also enabled us to bump up the production schedules on the plastic MacBook and 15-inch MacBook Pro units. Next Up... Miscellaneous!