The Importance of Financial Stability
When you research potential suppliers, does it matter to you how long those suppliers have been in business? Do they have good reputations? Would it concern you to discover that one of them is an acquisition target for another, larger company? Would you get nervous if you started trying to work with one of them, only to find that they stock next to nothing and perhaps have credit or cash flow problems?
These situations can all involve a company's financial stability – how long the company has been operating, whether (and how long) they've been successful, how solvent they are, what their credit ratings and debt load are. They should be important to you, the customer, because they are a reflection of the potential supplier.
Putting your trust in another company and relying on them to come through for you is a risk. And it's your responsibility to make sure that risk is minimized. Understanding a supplier's vulnerabilities and being equipped to handle them can be part of that strategy.
Making money does not equal financial stability. A company can have high earnings but be unable to withstand a sudden sales decrease or the departure of a key employee. Those are temporary issues, but a supplier's ability to endure them is important to financial stability.
Of course, all companies have a starting point and can face struggles along the way. How prepared they are when the business is launched, and how well they address challenges, are factors that contribute to success and financial stability.
Learn more about NewAge Industries' financial stability here.
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