Stacey Abrams - Level Up : Rise Above the Hidden Forces Holding Your Business Back

The moment our business fell apart, we didnt know it was the end.

Like a cruel joke, the wheels began to come off the very day we scored our most important win. On a glorious morning in the fall of 2010, Lara got word that a global retailer wanted to buy fifteen hundred unitstwenty times our typical orderof the product we had invented to help busy parents feed their babies. Our patented spill-proof water bottles for little ones were already selling out in small boutiques and on Amazon, but now they would be distributed by a big-time grocery chain. The deal would take Nourish, our scrappy little company, to the next level.

As business partners with varying degrees of risk tolerance, we often jokingly refer to each other as Yes and But. Lara plays the eternal optimist. Shes a cheerleader at heart, with a sharp eye for business and a head for innovation, who sees the possibilities in every opportunity. Stacey, on the other hand, serves as the resident realist of our partnership, a cautious contrarian who is a stickler for thoughtful deliberation before we make any big moves. So of course, as soon as she shared word of this news, Lara was ready to go for it while Stacey wondered if we could actually deliver on this opportunity.

But after her initial elation (including a few fist bumps to herself), realization hit Lara hard as she began to think through what it would take to capitalize on the opportunity to truly go national. As she sat in her car in the parking lot of her sons day care, she put her head on the steering wheel and quietly burst into tears. By the time we met to discuss it in our midtown Atlanta office, despair had set in.

To take advantage of this order, we would need to automate our equipmenta big capital investment. And wed have to pay all our suppliersanother significant outlay. Separately, wed both reached the same conclusion: We couldnt afford to fulfill the order without payment up front. But the retailer wanted favorable payment terms, granting them thirty days to pay us after we shipped the fifteen hundred bottles. Known as net 30, the arrangement could only work if we had the cash on hand needed to pay our manufacturers to produce the bottles and their labels; to pay our suppliers for the boxes, the brand tags, and the cap safety seals; and to pay to ship the product. All these suppliers and vendors needed to be compensated so they could pay their own suppliers and employees, and, of course, we had to pay our employees. While we had modest revenue, we had not yet turned a profit, which meant we had to wait for retail customers to pay for the orders wed shipped weeks ago in order to have the money to finance this big break.

Over the next few months, we scrambled to bargain with suppliers who hadnt been paid yet for our previous factory runs. We called everyone we knew, hoping to find another vendor who might do it on credit. We groveled for more time, and we begged customers to pay their invoices. We were able to pull off the first few orders by scrapping and scraping, working in the filling plant ourselves and leaning on the grace of our partners. In the end, six months later, we had to face the painful truth: we just didnt have the cash to pay our vendors to make the product and deliver the new order in the required time frame.

When we launched Nourish, we had cobbled together nearly a quarter of a million dollars from family and friends to produce our water, pitch our merchandise, and set up our company. Any revenue we earned was solely earmarked for the business, plowing the funds back into production, sales, and marketing. But as our customer base grew, they took longer and longer to pay; we were running out of cash while we waited for unpaid invoices to be settled. The hunt for new investors also stalled in a time of tech-focused venture capitalists. No one saw Nourish as the next big thing.