When I first met Rosa she was a women hurting from the unexpected death of her husband, lover and as she told me, best friend. He was her rock. But now he was gone. She was not alone. Her children were all very accomplished recent college grads. One worked for a law firm while on his way to law school, and the other was studying medicine. Fortunately for the young adults, they worked hard and had received scholarship monies to help them with their schooling. Graduate school was another question solved by the offspring’s graduate grades. Hard work and effort resulted in positive outcomes. But Rosa’s problems centered more on her need to do something. Empty-nester, the kids didn’t need her. Now with her husband gone, she had a heightened desire to do something and fill the void now left in her life. Not rich financially by any stretch left philanthropy and volunteering out. She still needed a way to support herself. She pulled on her past.
Rosa is a person who wanted her own business. What she lacked in business training, she made up for with energy, persistence and street smarts. She had just enough to get things started on some track. She knew about the importance of location, of identifying your clientele, of learning “how to” before pulling the trigger. But Rosa’s “how to” analysis was limited. She did not know what she did not know. So off she went with the tools she thought she needed.
Rosa had worked in a florist shop for most of her adult life. That is where her knowledge was seated. But being a floral designer only gave her some, repeating the word some, of the required knowledge to open a shop of her own. Yes, Rosa’s persistence and unlimited energy carried her forward getting her out of the starting gate. Fear was not a word she could spell. So she opened the store, bought product on credit, and sold a ton of flowers. I mean a ton, and for way more than what she paid for them. Her biggest creditors were the nearby churches and hospital; and she extended credit to everyone.
She had certainly aced the location, in the midst of churches and hospitals. Her targeting was spot on. But, when she was asked what her cash flow was for the month she responded, “I don’t really know what you mean; all I know is that I have enough money in the bank to pay my rent for next month, so I’m in business for at least another month.”
After further conversations, Rosa finally understood why she only had enough money to pay the rent and not even pay herself. She extended credit to anyone. Now, that may be alright with the churches, they will probably pay, but she did not understand that she may have difficulty collecting some of her credited sales and the time she would now have to incur to manage her newly formed credit “department”. Something she could not afford right now. Her credit policy was starting to change, as was her knowledge of what she did not know.