How do I stay afloat? Need advice asap

[chrismarklee]

What you need to do is get another job besides your internet business. Also, maybe market something strange and unique. I know this may be hard advice. I see so many internet businesses failing

[LeroyB3]

Why not get try to get the upfront capital from your customers? I could definitely see a monthly fruit club or something similar. They pay $X/month to get A, B, and C. You now have the money up front to purchase that extra supply you need to get more customers. Just a thought. Much less risk this way as well.

[Zman]

Just about every small business owner has been in your situation. Here is my opinion. Marketing solves most problems... but if your shelves are not full (almost overflowing) with merchandise, then all the marketing in the world will only bring people in to see a business not ready for business. People make judgments on your store from day one. Put your best foot forward by making deals with local produce suppliers to get and keep your shelves full. Then... once the store is truly ready for business, turn your focus to marketing. You can market your business many ways for little or no money. It's hard work but it can be done.

Go to other businesses and ask them to refer people to you and you do the same for them. Put coupons in your customers bag to bring them back or give them a discount for telling others about you. Give a portion of sales to charity over a day or weekend and tell the local media about it (and get free advertising when they interview you).

There are many, many ways to market your business. But make sure you are ready for business first. The more return business you have the less your overall advertising costs will be and the higher your net profit.

[shrinkme]

There are a lot of good suggestions here. I only wanted to say that problem solving tends to be something you do in business a lot. Ultimately you must figure out a way through cash flow issues and build your business. Good luck!

[lukedenton]

Friend,

You are faced with a classical business problem. It is a very common problem. If you had gone to business school, you would have learnt all about it and how to deal with it.

I have had dozens many businesses come to me for help on this same problem. Something like this: I want to but X to do Y, and from experience I am 100% sure that Y will be successful. But I don't have the money to do Y, and I cannot take a loan because the interest will make Y unprofitable.

If I was consulting with you one-on-one I would look over all your finances and sales and formulate for you an exact plan. But since I don't have that information I will give you general advice on what to do.

Follow this and I guarantee your problems will be solved soon.

First, DO NOT TAKE MORE LOANS. The interest rates will likely erase your profitability in sales. You are in retail--small profits--you cannot take the hit. DO NOT MAKE THIS MISTAKE WHATEVER YOU DO. I cannot tell you how many make this mistake before they see me.

You need to CUT BACK ON EXPENSES. how much are you spending on electricity? On water, etc? Make a list of your expenses, and cut back.

Keep track of how much you are shaving off each expense.

You say you are in a "great location". That means it must be valuable, no? This means, you can definitely rent out some space. Storage space, in particular, would be easy to rent out. And you gets lots of traffic? That would make it easier.

See if you are wasting space. Many small retailers have too large storage areas, completely unnecessary. I have seen this. Get rid of clutter, stack things more closely, and rent out the extra space. With i work with clients, I develop a list of product and profitability and the cost to keep the product in the store. You should make one of these too and make sure that you get a positive value on all your product.

Use this extra money to but the most profitable inventory you are wanting.

Finally should you work seven days a week? If you can, yes. But you can maybe reduce your hours. Keep a written account of your sales every hour and after a few weeks look for weak hours with low sales. You can cut off these hours instead of a whole day.

I hope this helps.

[nealrm]

Luke is right. Getting a loan or buying on credit is only going to make things worse. DON'T DO IT!! It is EXTREMELY poor advise!!!

Right now you are using the profits on current sales to buy goods to replace those sold. However, you don't have enough profits to expand and buy addition inventory. If you bought on credit, the sale of those good would also have to go into purchasing replacement inventory PLUS you would have an additional bill of the interest on the credit.

As Luke stated this is a classic problem, the root of the issue is that you are not making enough profits. There are 3 ways out: 1) Reduce cost, 2) Increase prices, 3) Get out of the business.

Right now fresh, locally produced goods are an "in" item. Don't try to compete with grocery store prices. Instead aim for the premium prices. Even a slight 2% price increase can put addition profits in your pocket that can be put towards addition inventory.

Last: One of the key insights in business is knowing when a market will not support a business. Sometime you can't cut enough costs or increase profits to make a business worth your time. Too many people fall into the trap of only seeing the money coming in the front door and ignoring the money going out the back. Sales have to cover more than just inventory and operating expensive, they need to provide you with a reasonable salary. Loans won't resolve that issue.