Rivendell saved for now...

[Ozz]

Originally Posted by David Kirk

So I'm not a finance guy by any means so this question might be silly.....but isn't this the reason that they offer a "line of credit"?

I always assumed that one of the reasons this financial tool exists is to help even out cash flow of a seasonal business. Why wouldn't Rivendell quietly get a line of credit to maintain cash flow during the lean months?

A sincere question.

dave

Many reasons for a line of credit, and seasonality is typically one of them, and is another way of looking at the cash conversion cycle (CCC).

The CCC typically means you need to invest capital to buy raw material, then produce the good, sell the goods, and then collect money from the buyers. Then the cycle starts again....A line of credit lets you purchase the goods (and make payroll) until you can collect money from customers.

Bankers will look at the cash flow of a company when determining whether to establish a line of credit. This means, at the end of the CCC, is the company making money after paying all their bills.

Bankers will also look at collateral assets (inventory, equipment, real estate, cash, A/R, etc) to secure the line of credit in case the CCC business plans go sideways...

It is pretty important to get a LOC in place when times are good and before you need it. A lot of companies like to have one even if they don't need it for "window dressing"....having a LOC tells your vendors that your bank views you as creditworthy, and maybe they should too and offer favorable terms.

There is a lot more to this...I am not a lender, but work closely with some.

Back on topic, the challenges Rivendell/Grant is facing are not that uncommon....lots of businesses have great ideas and grow the "fun" side of the business without paying proper attention to the "boring" financial side and end up over extended. A good banker (there are a few) would have helped.

[David Kirk]

Good stuff - thank you.

dave

Originally Posted by Ozz

Many reasons for a line of credit, and seasonality is typically one of them, and is another way of looking at the cash conversion cycle (CCC).

The CCC typically means you need to invest capital to buy raw material, then produce the good, sell the goods, and then collect money from the buyers. Then the cycle starts again....A line of credit lets you purchase the goods (and make payroll) until you can collect money from customers.

Bankers will look at the cash flow of a company when determining whether to establish a line of credit. This means, at the end of the CCC, is the company making money after paying all their bills.

Bankers will also look at collateral assets (inventory, equipment, real estate, cash, A/R, etc) to secure the line of credit in case the CCC business plans go sideways...

It is pretty important to get a LOC in place when times are good and before you need it. A lot of companies like to have one even if they don't need it for "window dressing"....having a LOC tells your vendors that your bank views you as creditworthy, and maybe they should too and offer favorable terms.

There is a lot more to this...I am not a lender, but work closely with some.

Back on topic, the challenges Rivendell/Grant is facing are not that uncommon....lots of businesses have great ideas and grow the "fun" side of the business without paying proper attention to the "boring" financial side and end up over extended. A good banker (there are a few) would have helped.

[bikinchris]

Originally Posted by cloudguy

Or artisanal pencil sharpening, which is actually a "real" thing:

http://artisanalpencilsharpening.com/about.html

No. Just....no. Mechanical pencils are FAR superior to wooden pencils. Quit being luddites! Get yerself a top of the line titanium or carbon fiber pencil.

This one is $200.00:

[/sarcasm]

[peanutgallery]

A year ago I suggested getting the guy a gift certificate for the services of my accountant. He needs this more than anything as cash flow and all that is obviously problem. Nothing has changed, don't know how long you can chase windmills

[dancinkozmo]

Originally Posted by bikinchris

No. Just....no. Mechanical pencils are FAR superior to wooden pencils. Quit being luddites! Get yerself a top of the line titanium or carbon fiber pencil.
[/IMG]

mech pencils = the SRAM of pencildom...here is the super record...

https://www.jetpens.com/Uni-Mitsubis...-of-12/pd/3517

[cloudguy]

Originally Posted by bikinchris

No. Just....no. Mechanical pencils are FAR superior to wooden pencils. Quit being luddites! Get yerself a top of the line titanium or carbon fiber pencil.

Just watch this video and tell me if you still feel that way.

[gdw]

This place is circling the drain....urban pencilsexuals. Omfg.

[cloudguy]

Originally Posted by gdw

This place is circling the drain....urban pencilsexuals. Omfg.

Don't knock it, till you try it.

[bikinchris]

Originally Posted by cloudguy

Just watch this video and tell me if you still feel that way.

And he did that with a straight face. I tip my hat to him. Chapeau, Monsieur.

[Joe Remi]

Geez you guys. The idea was that if you hadn't purchased a Riv thing this month then you probably don't need anything, but maybe $20 down on a gift certificate for later would be cool. You don't HAVE to do it and I didn't: the email reminded me that I've been meaning to snag a couple things they sell for a while and kept forgetting about it. It's not a big deal.

[rwsaunders]

Originally Posted by David Kirk

So I'm not a finance guy by any means so this question might be silly.....but isn't this the reason that they offer a "line of credit"?

I always assumed that one of the reasons this financial tool exists is to help even out cash flow of a seasonal business. Why wouldn't Rivendell quietly get a line of credit to maintain cash flow during the lean months?

A sincere question.

dave

A business LOC requires some amount of collateral to help offset the risk that the lender takes when issuing the proverbial "note" and your financials need to be in order as well, right? Who knows, perhaps he doesn't have the collateral needed to establish a LOC, doesn't believe in banks, doesn't want to tie up his personal assets or his lender read his blog.

Someone suggested a model where the founder, entrepreneur, ideaman, etc. passed the torch to a business manager and let each other do their thing...a little succession planning. Hopefully it's not too late.

[Louis]

Originally Posted by gdw

This place is circling the drain....urban pencilsexuals. Omfg.

Philistine.

And I'm sure you just love how your $65 Walmart bike rides...

[fourflys]

So I've been a Riv guy in the past and a Grant supporter... I wanted/want an orange Ram, bought a Bleriot I wish I hadn't sold, and got my dad to buy a Hilson... But, nothing that Grant has produced in the past few years (short of the Roadeo/Roadini) has even peaked my interest... double top-tubes? Why?

I do wish Grant/Riv well, but he has to change something... I was just having a conversation over the holiday about folks who are good at one or two things (an engineer with a great idea for example) that starts a business and thinks they can do the whole thing, it usually doesn't work out well... a smart business person realizes their shortcomings and surrounds themselves with folks who can fill in those gaps.

At this point, Black Mountain Cycles fills any need that Riv might have in the past... with the steel Road (better Ram?), MonsterCross (fat tire "country"), and the new Road+ (650b), why would I even look at Riv for a frame? Black Mountain seems to have realized what Grant couldn't... also, Mike is able to offer his stuff at a much better price and, I feel, a better overall frameset.

I supported the last fundraising effort because I really do like the company, but not this time... I do feel bad for the employees though, may who have stuck with Grant in the hard times.

[CNY rider]

They don’t seem to be so saved to me.
When you take the head off a chicken the legs keep running around for a while after.
That doesn’t mean it’s still alive or has a viable future.

[MikeD]

Originally Posted by fourflys

So I've been a Riv guy in the past and a Grant supporter... I wanted/want an orange Ram, bought a Bleriot I wish I hadn't sold, and got my dad to buy a Hilson... But, nothing that Grant has produced in the past few years (short of the Roadeo/Roadini) has even peaked my interest... double top-tubes? Why?



I do wish Grant/Riv well, but he has to change something... I was just having a conversation over the holiday about folks who are good at one or two things (an engineer with a great idea for example) that starts a business and thinks they can do the whole thing, it usually doesn't work out well... a smart business person realizes their shortcomings and surrounds themselves with folks who can fill in those gaps.



At this point, Black Mountain Cycles fills any need that Riv might have in the past... with the steel Road (better Ram?), MonsterCross (fat tire "country"), and the new Road+ (650b), why would I even look at Riv for a frame? Black Mountain seems to have realized what Grant couldn't... also, Mike is able to offer his stuff at a much better price and, I feel, a better overall frameset.



I supported the last fundraising effort because I really do like the company, but not this time... I do feel bad for the employees though, may who have stuck with Grant in the hard times.

I don't think the quality of BMC's Chinese steel frames are near the quality offered by Rivendell.

Maybe part of the problem is that Rivendell is not a frame builder, and can't compete with those that are on price. Also, the steel frame/bike market has a lot of competition.

I also think there's a shrinking customer base. I don't think young people are getting into cycling. Century rides that used to fill up in the Bay Area are not that well attended anymore, for example.