How is austerity effecting your business?

HellFireClub

Just thought I'd throw this out there and see what kind of a debate we might be able to have on this topic.

Personally, I run an online business in Ireland, I don't give credit so I'm to a large degree insulated I suppose from bad debts, in the sense that I'll never be in a situation where I've supplied someone but then ultimately not get paid for the goods. Having said that, I've noticed it's getting more difficult every month to convert sales queries into actual sales. We spend a lot of time getting the prices right within the business, but the problem is that there just isn't any cash out there. I can't get into what the product line is unfortunately because the business is still relatively new and on that basis, vunerable to competitors, but it is a whole skill in itself I think to develop actual sales at the moment from queries.

More and more, I'm seeing folks I know who run small businesses, go out of business or if that hasn't happened yet, it's surreal and sometimes shocking, watching people you are close to, trying to fight every day to keep the doors open and seeing people that work for them, getting let go so that ultimately the ship can still float and the whole thing doesn't go under.

How anyone who is providing credit at the moment, is staying at the races, is literally beyond me, and I'm basing that just on what I see around me with lads who are in business and are giving account facilities.

TheCostumeShop.ie: Ronan

Just to clarify getting paid upfront does not mean you ultimately wont get paid for the goods, you need to have a budget and buffer to deal with card fraud and slippage. The Merchant will take up to 6 months before they tell you you've been targeted by fraudsters. I know you probably know this but thought it was worth mentioning for the newbies.

Credit is a huge problem (and opportunity) in the current environment.

Chet Zar

HellFireClub wrote: »

Just thought I'd throw this out there and see what kind of a debate we might be able to have on this topic.

Personally, I run an online business in Ireland, I don't give credit so I'm to a large degree insulated I suppose from bad debts, in the sense that I'll never be in a situation where I've supplied someone but then ultimately not get paid for the goods. Having said that, I've noticed it's getting more difficult every month to convert sales queries into actual sales. We spend a lot of time getting the prices right within the business, but the problem is that there just isn't any cash out there. I can't get into what the product line is unfortunately because the business is still relatively new and on that basis, vunerable to competitors, but it is a whole skill in itself I think to develop actual sales at the moment from queries.

More and more, I'm seeing folks I know who run small businesses, go out of business or if that hasn't happened yet, it's surreal and sometimes shocking, watching people you are close to, trying to fight every day to keep the doors open and seeing people that work for them, getting let go so that ultimately the ship can still float and the whole thing doesn't go under.

How anyone who is providing credit at the moment, is staying at the races, is literally beyond me, and I'm basing that just on what I see around me with lads who are in business and are giving account facilities.

Interesting points raised here.

1) Clearly I have a vested interest in claiming this, but it makes it no less true: the move in retail, and everywhere else, is towards online. This means that those who will survive will move there - and those who succeed will understand how to achieve the crucial factor you highlight (converting visitors to sales). Achieving this is dependent on knowing how to use techniques like PPC, SEO and social media to your advantage. This is crucial.

2) I'd challenge this assumption that there is no cash out there. There is cash - it's just that's it not being spent. There is a difference. If it's not being spent, it's partially that it's not there - but it's also that it's being saved instead of spent. Again, this ties back into the first point - if customers are moving online, then those who are effective at converting those customers online will be the ones who take a slice of those savings.

neris

We dont operate online but we badly were affected back in 08/09 with heavyish debts and a loss of customers and it was getting to the point where the bank were threatening to cut the overdraft which definitly would have sent us under but changing the business, taking a more hands on approach and investing our own money back into the business has paid off. Weve recently had to move one of our premises due to it being to small due to demand but now it seems that the new place is going to be the same because it would seem we got the right location and offer the right prices and a big employer close by who we didnt think would have many staff needing our services has too many needing our services.

I do agree that there is money out there as such but I think people are afraid to spend it because they are A) afraid that if they buy this week it could be cheaper next week and people dont want to be seen throwing cash around incase they upset the out of work or thsoe without much cash and I think the media are to blame for this social guilt.

maxer68

you have to try and look at the market another way.

86% of adults are working
65% of houses have no mortage
20% of houses have mortgages of less than 100k

those buying houses today have spare cash tose who bought pre 2002 have spare cash (unless they re-mortgaged)

so take the current 30-40 year olds out of your target (about 20% of overall market) and target everyone else - this group is the group who most likely have a large mortgage / negative equity / young children and very little spare cash.

I've moved my business away from this market and i've had excellent growth and about to expand further as the retail rents have hit the floor.

TheCostumeShop.ie: Ronan

Couldn't agree more, there really has never been a better time to start a business. Spent today shooting a TV show for RTE and some of the positive stories from around the country are really inspiring.

Plus if you can get ready for when the good times roll around again and position yourself well, you'll do great in the upswing.

Chet Zar

There ya go. All a matter of perspective and not accepting everything the media would have you believe.

Chet Zar

TheCostumeShop.ie: Ronan wrote: »

Couldn't agree more, there really has never been a better time to start a business. Spent today shooting a TV show for RTE and some of the positive stories from around the country are really inspiring.

Plus if you can get ready for when the good times roll around again and position yourself well, you'll do great in the upswing.

Recommend checking out Local Heroes - A Town Fights Back on RTE1 tonight at 8.30 for more of that good stuff!

Kinetic^

A lot of maintenance but not a lot of new installs/sales which is fine. Growth is in or around 100% and have finally found the right business partner. Looking forward to the next 5 years.