Landing your first national retailer feels like the moment everything changes. Then the purchase order arrives, and cash starts leaving your account weeks or months before any of that order comes back as a payment.
Fund Your First Retail PO With a 13 Week Cash Flow
That gap is a timing problem, not a sign the deal was a mistake. A first PO usually asks you to fund the production run, freight into the retailer's warehouse, and often a slotting fee before you are paid, and the invoice then waits on net-60 or net-90 terms. If the sales forecast is the only view you have, the order can look like growth while the cash underneath it runs thin.
Takeaways
Build a 13 week cash flow before you commit production, and put the PO on it as a series of dates instead of one big number: production deposits, freight, slotting when it's actually due, and the payment on the terms you really have.
Treat slotting as a real date on the grid. Ask the buyer when it's due, whether it comes as a separate invoice or a deduction from your first payments, and whether it's refundable if the item exits.
Plan on a smaller first check. Put a deduction haircut on the remittance for what you can already see on the deal sheet, and update it once the first payment teaches you something.
Once the gap is visible in dollars and weeks, choose on purpose whether operating cash, purchase order financing, an inventory or AR line, or equity is the right way to cover it.
Erin Wall of Lunr Capital: the most common mistake she sees is founders not really understanding their product margin.
Read the full piece: Fund Your First Retail PO With a 13 Week Cash Flow
Quick checklist
How much cash leaves before any payment comes back, and in which weeks?
When is the slotting fee due, and is it a separate invoice or a deduction?
What terms are on the PO, and what deduction haircut are you assuming on the first payments?
If there's still a gap, which funding path are you choosing on purpose, and what does it cost?
Market pulse
Stride Consumer Partners took a majority stake in Clio, the refrigerated Greek yogurt bar, on October 6. Clio is on track for more than 150 million bars this year from its own 86,000 square foot plant in Piscataway, New Jersey, and the release didn't share deal terms. Owning production ties up cash early, but it gave Clio control over capacity when big orders landed, so it's worth deciding early whether a co-man or your own line fits your cash runway. PR Newswire: Clio acquired by Stride Consumer Partners
Sojourner merged Lornamead and AMG Brands into LPNA Group, with Capital One leading the senior secured financing. The combined company brings Yardley London, Finesse, Aqua Net and Lypsyl together with Wizard, Handi-Wrap and Scrub Free. It's a good reminder that banks still lend against steady consumer staples cash flow, and that predictable sell-through and clean books are what unlock debt to fund inventory, more than headline growth. Sojourner: Lornamead and AMG Brands form LPNA Group
Also worth a read
Funding the first order is one cash question. Keeping inventory from quietly eating that cash as the account grows is the next one, and this walks through how to plan it: Inventory Management in CPG: Fix Cash Pressure as You Scale.
If you have a PO in hand and would like a second set of eyes on the weekly cash view before you commit production, reply to this email, book a Teicor intro, or reach out on the contact page.
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