Hi Guys,
Ive been on this site for a while and have gotten a wealth of advice from every one.
My wife and i own a small bussines in Melbourne. The bussiness is running good and its at the stage where i can work full time some where else and earn a good income too. We have a great part time staff who can go to full time to help operate the bussiness and i will still have alot of controll over the bussiness.But has any one noticed how things are getting real tight in terms of CASH FLOW?
Suppliers are chaning all there Terms from either COD to 30 days rather then your normal 60 to 90 Days.
Even though we earn a good living from it we are comming to the conslusion that small bussiness are a thing of the past??
The margins are getting smaller every year, there are more retail and shops comming up every year, more customers are comming in but spending alot less any one else has seen this trend?We are just a bit worried that if things get more sour in small bussiness we could really risk loosing everythig we have built.
Am i just beeing anxious about this or do you thing that this is a common problem know???Cheers
JohannJpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Hi,
I run a medium size business, however i know plenty of ppl who run small business ( my parents currently run a local bakery).
Your concern and fear is VERY common- rest assured.
Everytime i walk down to the local shops and speak to the local business all i hear is:
1. Less and less customers- all migrating to the bigger shopping centers
2. Some wholesalers has gone burst and they are now force to do business with other wholesalers who dont know them hence not gibing them a discount and COD 30 days instead of 60 as you mentioned.
3. Hard to maintain let alone EXPAND the business.Running any business is hard….especially for small business.
Keep at it my friend.Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
I run a business where the general terms of all my suppliers are 30 days EOM and my clients basically stipulate thier own terms upon you which are 90 days EOM. We are always forecasting work/payments etc 3 months in advance, so at the moment June/July are long gone, and we are looking well into August already!
I cant speak for retail as we are in the mining industry, but keep chipping away at creating a month or two buffer before handing over some control to your employee, so if they do start to falter, you can step back in before its too late. Worth considering.
I was once in your position, but the employee circumstances changed in an extreme way and faster than immediate, right when the handing over was imminent, so back to square 1, with the finger on the pulse.
Keep at it!
pinkboy
I have been in and out of my own wholesale business a couple of times over the last 20 years and presently managing a business with a turnover of 18 million annually … wholesaling to small business within the food and beverage market.
I have seen the decline /changes in small business over that period. One of the major changes has been the proliferation of the franchise groups (just look at the average food court) and the incorporation by the major chains of different offerings in their business. (Coles/W/worth’s now into bakery, fruit, liquor petrol, pharmacy etc etc…)
The other issue is the average small business owner is too busy in their business rather than working on their business. Generalizing the average small business owner I meet has just subscribed to buying themselves a job because somewhere along the line they have been working for someone else and thinking “You know what I’m working for an idiot. If I run this business I would do this and this differently etc. etc.” So what do they do…. they beg, borrow or steal buy their own business and instead of working for an idiot they start to work for a lunatic (themselves). Because they may be good at cutting the hair or flipping the burger or hammering the nail but when it comes to the most important thing that I consider in any business and that is the sales and marketing they have no idea… NONE…
The reality is for any business is that they have to get more people in their door to buy more and come back more often …..It isn’t the actual making of the burger but the sales and marketing. Look at MacDonald’s for example they have a very average product but they sell it by the bucket load and have put the average burger joint out of business. Why because of the sales and marketing …… (Would you like fries with that?. When was the last time you heard a small business ask you something similar for example??)
In regard to trading terms 60 to 90 days you looking at the dinosaur era but small business is reluctant to change with the times and ask the same of their customer base . One of the hardest things I find that business owners and salespeople are reluctant to do is ask for the order or the business and/or ask for their money on time.
Any way I’ll stop ranting now but you aren’t alone my friend.
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