Excellence is not a skill; its an attitude...
I agree, as you know Im not religious but the saying 'God helps those who help themselves' is very true.
We are all in the same boat.
What I have done in the past, is approached my customers, and asked for a deposit, then used this money to service their orders. The deposit helps to buy the raw materials.
The other thing is that it may be that your prices are too low!
Increase it by 20%, yes you will loose some customers, but the ones that continue will still give you the same profit in Rand terms, and you will find that you are not so busy chasing your tail, and then you can use the time to develop the new products at the new margin price.
After some time the lost customers will return at the new price, because of service and quality.
Some times we dig ourselves into this hole because we think we will go out of business if the price is high. Wrong.
Sometimes a cheap price gives the impression that it is a poor quality product. Price is perception, we tend to take cost and add a factor onto it it reckon that we are making a profit. Bull, sometimes you have to look at the product, and there is no competition, so you have the chance to beef up the price, and make more profit because of the uniqueness of your product.
Maybe do an exercise with your brother. Get him to spend a couple of days with you, to understand your business, then get him to advise what you must do to make money. He has the skills, so listen to him.
Want I have done is that I have an over draft which I use to buy raw materials, and maintain the account, the cost of the over draft is a factor which I add into my expenses and is definitely worthwhile. It is about using facilities to make our business run better. My over draft which is a significant amount, costs me around R1500 a month, but making use of it produces about R30k a month. If I did not have the overdraft, then I could not make the extra profit, so it costs ame a coupla bucks, its all about management of the money, or rather micro management of money. Do not use the fact that there is R1500 cost for the overdraft so I will not use it, I would then lose the R30k profit.
Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
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Dave A (04-Dec-13)
Also, you must use a bit of credit, you need to create some history.
Lets say you the bank manager, and a client walks in who has never needed credit for 10 years, always paid everything cash, but now you approach him for a loan. Is this an impressive customer to the bank manager, or does the bank manager see this as a problem customer this way "Heck this guy paid everything cash for 10 years, now he wants credit, sh!t something is wrong, his going bust and wants to take my money with him, no definitely no loan here".
Now lets say you have a credit record couple grand every year, paid off on time, never had a late payment, you go see the bank manager and you want a bigger loan. The manager looks at the record, and says yep no problem, has good history paid on time and there for is a good customer.
Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
Solar pumping, Solar Geyser & Solar Security lighting solutions - www.microsolve.co.za
This thread jolted my memory back to a post my idol, Rand Fishkin from Moz.com, wrote a few months back. The post was entitled "We'll work for peanuts, but we won't work without meaning." (http://moz.com/rand/well-work-for-pe...thout-meaning/)
In the post Rand refrences a TED talk by behavioural psychologist, Dan Ariely, which addresses the topic of what makes us feel good about our work. I can safely say that this is one of the TED Talks I've seen that has stayed with me ever since watching it; I found it absolutely fascinating and I recommend those interested in this topic and behavioural psychology in the workplace give it a watch.
I agree with Dan Ariely and Rand Fishkin that, in the workplace, we are driven by autonomy and seeing the fruits of our labour contributing to something meaningful. Dan talks about employees becoming demotivated when their efforts were destroyed, almost regardless of the level of pay, and I've seen this effect take place first hand in at least a couple situations.
My opinion is that a good, constructive working environment and the opportunity to contribute meaningfully to something great instead of simply being a pawn in someone else's Chess game supercedes the desire for a large salary.
I do somewhat agree with Adrian, though, in that people's motivatations must at least slightly differ according to their current circumstances and ambitions. I will add that it must be very difficult to provide the sort of motivation that Dan Ariely talks about, when in a line of work where there is less room for creativity/autonomy.
Would love to hear others' thoughts on the above.
One thought that I've had is that third world countries (if I'm generalising) may not experience the same desires as people such as Rand and Dan when in an environment where job and financial security may be more scarce and provide more solace to an employee. Would anyone agree with this notion?
Mark My Words - Arbitrary thoughts on ordinary things"The way to gain a good reputation, is to endeavor to be what you desire to appear." - Socrates
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To accellerate cash flow, one can also use factoring to grow the business. Don't worry, it is OK to say the F word in business. Factoring is now an accepted form of business finance all over the world. I have personally assisted clients in growing their businesses. In one such an exceptional case, the business grew from a T/o of R2.5 million p.a to R40 mil in ONE year. PBT R12 mil!!
Caveat: Factoring does not suit every type of business. Get an expert to assist you. It does not work for retail businesses, individuals or a business on the skids. It is for business to business only. It is most effectively applied in a manufacturing environment with a long cash flow cycle. It also works with distribution, wholesale business, transport and services.
If you want to go this route, there are horses for courses. The banks are picky and will not consider discounting a debtors book below R500k. There are also private companies catering for smaller businesses. Some of these specialise in different injdustries. The facility is based on the ability of the debtor to pay, not the balance sheet of the supplier or applicant.
Anyone requiring further advice may pm me.
Excellence is not a skill; its an attitude...
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