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Thread: Small business biggest challenge

  1. #21
    Diamond Member tec0's Avatar
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    Business has a few factors that contributes to its success.

    • Firstly is clientele.
    • Secondly its goods and services supplied and rendered
    • Thirdly support and warrantee/guarantee if applicable.

    Now your supplier determines the second and third aspect of your business. The first aspect however is based on research. Fact is your business is a dead duck if no one needs what you are selling. Another factor is competitiveness... This is directly link to expansion, service provided and quality of goods and services.

    Then you have overhead, running cost and taxation to deal with.

    But your biggest risk in my opinion is your supplier.

    In my case as my supplier grew bigger their demands became more and more unreasonable. Unfortunately they did retain the right to change the parameters of the agreement when you signed there none negotiable contract.

    Thus I was no longer cost effective... Factually I was “Working for my supplier” because they wanted larger and larger orders then it just became impossible. I opted to import directly but even with massive funding behind me I couldn’t pull it off. Why? Because of contracts between fabricators and existing suppliers. So basically they own import rights.

    So the biggest challenges;

    • Find trustworthy supplier
    • Keep overhead low
    • Location
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

  2. #22
    Diamond Member tec0's Avatar
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    Quote Originally Posted by Dave A View Post
    Establishing a viable business model is the shop owners responsibility, not the suppliers.
    The interest of the supplier is to get its product to market and get paid by their customers (in this case those shops).
    I agree with you however let’s take a simple product let’s say you buy 1 cup of gold for X amount. And sell that cup of gold for y making z amount in profit. You are doing well everyone wants your gold and is willing to spend money on it as it is a sound investment.

    Now your supplier says wait a minute I now need you to buy a minimum of 10 cups of gold! Or you can no longer buy from us “the only suppler in the country” What do you do? Your clientele is good but it is not that good. You are making money but not that amount of money.

    Now because you cannot comply to the new demands of the supplier “the only supplier” your business goes away because you have enough business to sell 1 cup of gold not 10 cups of gold.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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    Location depends on what type of business you are operating. Location has no influence on our business.

    “the only supplier”
    How is this possible ?

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    Well, as the saying goes "If You Want to Run With the Big Dogs, You Got to Learn to Pee In the Tall Grass"

    If the clientele is so good then why don't you simply get orders for the volumes that the supplier requires and get a loan against the orders?

    Where there's a will there's a way. Nobody ever got rich because of giving up when they hit obstacles, the learn to work with them, go over them or go around them.

    It all boils down to locus of control, do you control the situation or do you let the situation control you?

  5. #25
    Diamond Member tec0's Avatar
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    Quote Originally Posted by HR Solutions View Post
    Location depends on what type of business you are operating. Location has no influence on our business.

    How is this possible ?
    Sadly it is possible if you want to know more Google "Exclusive Distribution Rights"
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

  6. #26
    Diamond Member tec0's Avatar
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    Quote Originally Posted by adrianh View Post
    Well, as the saying goes "If You Want to Run With the Big Dogs, You Got to Learn to Pee In the Tall Grass"

    If the clientele is so good then why don't you simply get orders for the volumes that the supplier requires and get a loan against the orders?

    Where there's a will there's a way. Nobody ever got rich because of giving up when they hit obstacles, the learn to work with them, go over them or go around them.

    It all boils down to locus of control, do you control the situation or do you let the situation control you?

    Some markets allow you to be creative others not so much.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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    Which ones don't allow you to be creative, give us a couple of examples.

  8. #28
    Diamond Member tec0's Avatar
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    Quote Originally Posted by adrianh View Post
    Which ones don't allow you to be creative, give us a couple of examples.
    I am sure that you are familiar with the term “affiliation” let me clarify “the act of becoming formally connected or joined”. Basically if a business uses a particular brand and your business is not affiliated with that brand you don’t get the service contract nor do you get to sell their stuff the end.

    There is no working around it there is no getting your foot in the door or anything like that. It is or rather it comes down to the simple fact; you are in or you are out. Now to get in is a crazy mixture of paperwork, getting qualified and financial investment. Not to mention you have to comply with ALL their standards.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

  9. #29
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    Quote Originally Posted by tec0 View Post
    I am sure that you are familiar with the term “affiliation” let me clarify “the act of becoming formally connected or joined”. Basically if a business uses a particular brand and your business is not affiliated with that brand you don’t get the service contract nor do you get to sell their stuff the end.

    There is no working around it there is no getting your foot in the door or anything like that. It is or rather it comes down to the simple fact; you are in or you are out. Now to get in is a crazy mixture of paperwork, getting qualified and financial investment. Not to mention you have to comply with ALL their standards.
    You can't blame companies for vetting their resellers. Imagine if Joe's corner garage started selling new BMW's without the appropriate knowledge and knowhow. What you need to realize is that you as the reseller is responsible for creating an environment that is suitable to the supplier because if you can't then somebody else will. Just think about any of the franchise operations, KFC, MacDonalds, Wimpy etc. you can't do as you please, you have to adhere to very very strict rules and standards...they boot you out quick quick if you don't comply.

    Bottom line is that it is your responsibility to ensure that you either satisfy their requirements or come to a suitable arrangement with them. So, why don't you take a loan, like we all do and create the required compliance?

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    Import yourself.

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