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Nairaland Forum / Nairaland / General / Business / Coping With Businesses That Involves Selling On Credit. Advice Needed (11538 Views)
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Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Tiskified(m): 9:19am On May 17, 2016 |
As a Chartered Accountant abs SME advisor, I would recommend you extend credit whenever you can. Extending credit helps you to sell at least 50% more than if you don't. But there is a downside. Selling on credit also exposes you to risk. The interesting thing though is that that risk can be controlled to a large extent because you’re the one who determines the credit terms. So before you decide whether to extend credit and if so, how much, consider 5 important factors Credit risk: Simply put, how much are you willing to risk? Do you have the financial resources to support the transaction? What if the customer never pays at all, will it adversely affect your business? Credit terms: You must decide in advance how much credit you’re willing to extend and how long you can afford to wait for payment. The terms can vary all the way from 10-day terms to 90 days or more. To reduce your risk, you may (a) require a down payment.(b) only offer 100% credit to customers who have previously settled within the agreed period. Credit qualification: Before you offer credit, determine if the person is credit worthy. But how will you determine if a business/person is creditworthy? Ask questions around, investigate chances are the person has done business with others before you and they can provide a rough guide for you. Credit policy: Develop a credit policy that covers the entire process when extending credit to customers, from when you offer to how you will recover any owed sums. The more details you have the better for you Credit review: Always review the purchase levels of those you extend credit to. Are they good customers? Do they desire more credit, if so do they deserve it? Finally an important point is to make sure you keep accurate documentation. I'm sure you'll be successful. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Laveda(f): 9:32am On May 17, 2016 |
Sleekyshuga: Mostly Igbo men |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by tete7000(m): 9:37am On May 17, 2016 |
tochman: It's my pleasure my brother. Actually giving credit won't really be a big deal if everyone can be honest and sincere. Myself and a friend are into similar kind of business. We opened a shop and sell pastas - indomie and the likes. It took sometimes before we understand the dynamics of the whole thing. We have actually lost some money before then, both from credit and direct stealing. People would come, buy and pay. Overtime, they would ask for credit, initially small and gradually graduate into big amounts. They would initially be paying until one day when you have much money with them and then they default and start avoiding you. You run after them, threaten hail and brimstone but to be candid if someone can't pay you, they just can't pay you; there is nothing you can do. Some of the time you have those who do everything to ensure they remain in your good book while with time we just understood some have had the scheme of defaulting at a time from onset. Always remember that business is business and not some compassionate ventures. People will want to make you look like a heartless and mean person sometimes, don't give in to the blackmail. If you need to be firm, be firm. If you lose money only you will bear the pain. We simply opened a shop near a market and don't have to distribute with truck but I know from experience of others that having a truck introduces another dimension to the whole equation - one of having to deal with dishonest drivers. Thus you might need to try and seek someone you can trust and who is meticulous enough to handle the truck. A reckless driver ruin the truck in no time, a lazy one will spend less time doing business while he finds some other avenue to spend time and a dishonest one turns the truck into some kind of atm machine. If you find an honest driver kindly keep him and treat him well, they are uncommon. Doing business like every ventures is tough but with patience, resilience, watchfulness and prayer you can pull through. Best of luck. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by tochman(m): 9:38am On May 17, 2016 |
myvision: Thanks bro. Your suggestions will go a long way |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by tochman(m): 9:58am On May 17, 2016 |
henrico247: The cement business was the first idea I had but the competition here is really crazy. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by tochman(m): 10:03am On May 17, 2016 |
Aribambam: Thanks bro. The man in charge of the company's depo here gave me orientation about the business |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by sorepco(m): 10:09am On May 17, 2016 |
Y does your sis not go into retailing while u deal with debtors?? At least you have a foot in both spheres as well as gaing both experiences for the business. .l tochman: |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by sorepco(m): 10:11am On May 17, 2016 |
tochman: |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by sorepco(m): 10:17am On May 17, 2016 |
Y do nigerians keep teferring to debtors as creditors?? If so then what do you call sum1 you owe money to?? LesbianBoy: |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by cherish(m): 10:42am On May 17, 2016 |
tochman:am into DAT business, I mean I run a bakery at ajah area. Add me on WhatsApp. 08034649417 |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by justmenoni: 10:43am On May 17, 2016 |
Op do you have other source of income?? Are you going to do the flour business as a result of unemployment or idleness?? Also are you toutish, do you smoke weed and drink strong alcohol if you don't then please don't dare try it oooo instead check othrr businesses that you can get a place and start, when a customer needs your service then let them come in then pay |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by tochman(m): 11:03am On May 17, 2016 |
Tiskified:Thanks for your professional advice. I will definitely put it into consideration. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by tochman(m): 11:09am On May 17, 2016 |
tete7000: Thanks for sharing your experience. Its will definitely serve as a guide for my biz. Thanks bro and may God prosper our businesses |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by tochman(m): 11:12am On May 17, 2016 |
sorepco: Someone else gave that suggestion earlier. Will think about it. Thanks |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by haywire1: 11:33am On May 17, 2016 |
cherish: Pls i need ur experience on hw u run ur bakery business frm start(machineries) to finished product. Also r u a baker? # |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Revolva(m): 11:53am On May 17, 2016 |
Selling on credit follow cos there must be loyal customers but na who you sell to |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Adesege(m): 12:20pm On May 17, 2016 |
Laveda: Send your account details first na. Is u afraid Include your mobile number too |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Adesege(m): 12:23pm On May 17, 2016 |
Sleekyshuga: Now I get. Ehn, is u not the cow skin and pepper seller in Oshodi ni Sleeky Shuga Nigeria Enterprises. Dealers in all kinds of meat, pepper, cow skin etc |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Olicris(m): 12:48pm On May 17, 2016 |
My business depends mostly on credit selling,,,am olisa by name a 400lv student of futy and a proud owner of an enterprises dat deals wit shoes of all kind..dnt wana type much but I knw my advice to u wil b of grt help.reach me on dis line 07064329680 |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by DedeNkem: 1:03pm On May 17, 2016 |
tochman: Never ever do business on credit! Never! Those who usually do that are incompetent and desperate sellers who don't care about the risk. In business, you should care about risks. Why should you take uneccessary risk that could lose you huge amount of money while those who buy on credit from you take no risk at all! It makes no sense to me. Sell your goods to only real customers who pay you in full before goods delivery. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by aduje(m): 1:16pm On May 17, 2016 |
tochman:@OP, PLS I AM ON MY KNEELS, I BEG YOU DO NOT SELL ON CREDIT IF: 1) You are new in the business because in any business of distribution on credit, there is usually at least one cabal. They can frustrate a new entrant. 2) It is the only business you rely on. 3) Learn from my experience; having worked in one of the petroleum depots for half a decade, i felt i could be on my own. I started supplying diesel and petrol on credit in 2009. As at the time of typing this comment; some people are yet to finish paying back. My $1 advice. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by tochman(m): 1:49pm On May 17, 2016 |
cherish: Sorry bro, I'm actually based in port harcourt, not lagos |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Chrisx1x(m): 3:05pm On May 17, 2016 |
icebebe: |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by flakky80: 3:14pm On May 17, 2016 |
Everything in life is a risk,am into it and I enjoy it,while some are faithful others are not, good thing is you continue with those that are faithful and when starting,do try them with little before entrusting them with the whole of your business but if you have a store,I see no reason why you should go into credit cause your goods sells everyday not even now that there's high demand for it.do not start up your business with credit sales. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Sleekyshuga(f): 4:09pm On May 17, 2016 |
Adesege:I forgot we partner .. It's actually Adesege & Co. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Laveda(f): 4:34pm On May 17, 2016 |
Adesege: Seen? |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Adesege(m): 5:13pm On May 17, 2016 |
Laveda: You is afraid jo cos i haven't seen your message. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Adesege(m): 5:15pm On May 17, 2016 |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Laveda(f): 5:23pm On May 17, 2016 |
Adesege: Network I guess. 1 Like |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by deltateam: 7:50pm On May 17, 2016 |
Djangocode: It depends on the owner of the business. If you say you don't want to sell on credit nah so. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by Nobody: 9:29pm On May 17, 2016 |
deltateam: One thing is certain about 90% of all Business: ''There must be debtors''... I aint saying strict policy of not-selling-on-credit shouldnt be applied, buh regular customers tend to buy on credit sometimes due to so many factors.. |
Re: Coping With Businesses That Involves Selling On Credit. Advice Needed by ikenna44: 6:43am On May 18, 2016 |
OP...I hope u find this helpful and timely as well... U can't do business without selling on credit...especially fmcgS My advice is: Always collect a certain percentage at the point of sale. Eg: if u give a customer goods worth 100k, be sure to collect @ least 50k cash. You have to have a fixed date as to when you will be coming for your balance. You have to have d disposition of a no-nonsense person to be successful in business these days. You still want to transact business with them and you don't want them to kill ur business with credit...so u need 2 work on ur interpersonal skills. Know when to chill and when to be blunt. If possible mark ur own stock...if u go 2 collect and they start sayin "market is dull"...check to see if they still have ur stock...if they still do; u might have to give them sometime... Ur interpersonal skills will be put to d test...so bring ur A-Game! Cheers! |
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