The credit crunch lands at my door.

kennyboy66_2

Alan_M wrote: »

50% on order balance on leaving port (india) - we pay in full in advance, that's how the business operates worldwide.

Ok.

I understand that you sell about 12 containers per year.

Why not order the 3 containers but "call off" one container at a time, 4/5 weeks apart ?

It would at least reduce the amount you need to borrow a bit.

What is the actual difference in cost between ordering 1 container and 3 containers (as a unit cost %) ?

silvercar

Are you asking the bank for more money than last year or the same amount?

Where did the profit from last year go? I wonder if the bank expect you to retain some of the profits from last year in the business to (help) fund stock.

I don't really understand the bank's philosophy. When I set up, I got an overdraft facility from the bank with only a personal guarantee, the bank had no asset security Surely its in the banks interest to give you finance so that they (and you) can make money.

Alan_M_2

kennyboy66 wrote: »

Ok.

I understand that you sell about 12 containers per year.

Why not order the 3 containers but "call off" one container at a time, 4/5 weeks apart ?

It would at least reduce the amount you need to borrow a bit.

What is the actual difference in cost between ordering 1 container and 3 containers (as a unit cost %) ?

Because each container contains a different colour material, they depart from different areas of the continent. We can't just offer one colour we need a small range. However we do spread them out, we don't have three leaving and arriving all in one go, there's 2-3 weeks between them, so the money needs to be available over a 6 week period.

Alan_M_2

silvercar wrote: »

Are you asking the bank for more money than last year or the same amount?

Where did the profit from last year go? I wonder if the bank expect you to retain some of the profits from last year in the business to (help) fund stock.

I don't really understand the bank's philosophy. When I set up, I got an overdraft facility from the bank with only a personal guarantee, the bank had no asset security Surely its in the banks interest to give you finance so that they (and you) can make money.

As we grow we need to buy more stock in advance, as we are a strange business that needs to buy it's stock in advance by up to three months our purchase costs are always increasing as fast as our turnover.....

This makes it impossible to grow without increasing finance.

This is a difficult business to finance, I've known that from day one, but the fact it's so difficult is why we have so few competitors.

Our biggest competitor was self funded (the founder inherited a sizeable 7 figure sum and started that way).

Nomad25

Maybe you should forget growth this year [I know easier said than done] and just concentrate on consolidating your business base and staying solvent, so you can get a jump when things start to ease.

I'm really sorry that we are all pontificating, but none of us can offer any you any real help.

tirano

Alan_M wrote: »

our purchase costs are always increasing as fast as our turnover.....

This makes it impossible to grow without increasing finance.

The problem with importing at the moment is the weakness of the £.
You could import something 6 months ago for £100, sell it for £150, only to find that it is costing £160 to import the same item now.
If thats whatts happening you are being a "busy fool", ie someone working very hard but not making any money.
You are in a tough place, Wholesaling , Importing and Construction are very difficult areas now, your business is in all three, my advice would be to step back and see if you can move into a new line of business

silvercar

tirano wrote: »

The problem with importing at the moment is the weakness of the £.
You could import something 6 months ago for £100, sell it for £150, only to find that it is costing £160 to import the same item now.
If thats whatts happening you are being a "busy fool", ie someone working very hard but not making any money.
You are in a tough place, Wholesaling , Importing and Construction are very difficult areas now, your business is in all three, my advice would be to step back and see if you can move into a new line of business

I think tirano has hit the nail on the head, sometimes you are so involved with the day to day running of the business that you don't see the bigger picture.

Nomad25

AlanM -any chance of you + family members maxing out your credit cards to tide you over - I know the APR's are horrendous, but 'means to an end'.

Alan_M_2

silvercar wrote: »

I think tirano has hit the nail on the head, sometimes you are so involved with the day to day running of the business that you don't see the bigger picture.

The currency fluctuations I'm well aware of, in fact the Euro completely stopped one of the other product lines we offer - limestone tiles. They became non viable.

The granite we buy in US Dollars, which has also hit, but our sale prices are based on what the purchase cost of each unit was, not what the prevailing rate is on the day in question, effectively we build rate fluctuations into our prices. The demand is still there as it's not like we're alone in the exchange rate problem, it's across the board.

I find it's the public that are mostly unaware of this, I've had a couple of enquiries this week where people simply didn't comprehend how our prices have increased...they assumed we should be discounting as the economy is bad, yet they specifically wanted products sourced from Portugal.

Alan_M_2

Nomad25 wrote: »

AlanM -any chance of you + family members maxing out your credit cards to tide you over - I know the APR's are horrendous, but 'means to an end'.

Unfortunately not, we don't really use them, so applying now for a fistfull isn't likely to work....