open for buisness for 5 weeks: worried about not having enough money for stock
- Thread starter funkylady
- Start date
MichaelBurke
Registered User
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- 196
Re: worried already
What type of business are you in?
What type of business are you in?
Re: worried already
From the wording of the OP I assume (correct me if I'm wrong ) that you may be in the clothing business either ladies and/or childrens. If you got credit from suppliers on commencement and are meeting (a) your liabilities to them and (b) your outogings ( rent etc & drawings/tax provision) then will you not also get credit from your suppliers when purchasing the replacement stocks? The clothing business ican be difficult, especially if you are left with unsold summer stocks coming into winter and if the credit period from suppliers is less than the anticipated time to sell the new stocks then a temporary stocking loan or bank overdraft will usually be necessary. I'd suggest a chat with your accountant, look over your original business plan and see how the first actual 5 months compare with the projected on the business plan. Then you may be better informed in good time to have provisions in place before you need to pay for the replacement stocks.
From the wording of the OP I assume (correct me if I'm wrong ) that you may be in the clothing business either ladies and/or childrens. If you got credit from suppliers on commencement and are meeting (a) your liabilities to them and (b) your outogings ( rent etc & drawings/tax provision) then will you not also get credit from your suppliers when purchasing the replacement stocks? The clothing business ican be difficult, especially if you are left with unsold summer stocks coming into winter and if the credit period from suppliers is less than the anticipated time to sell the new stocks then a temporary stocking loan or bank overdraft will usually be necessary. I'd suggest a chat with your accountant, look over your original business plan and see how the first actual 5 months compare with the projected on the business plan. Then you may be better informed in good time to have provisions in place before you need to pay for the replacement stocks.
Brendan Burgess
Founder
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Re: worried already
Hi funkylady
Have you arlready paid for the stock you are selling at the moment? Or are you worried that you won't be able to pay for this when it comes due?
Have you worked in the fashion retail business before? The reason I ask is that cash and stock management is so tricky.
Brendan
Hi funkylady
Have you arlready paid for the stock you are selling at the moment? Or are you worried that you won't be able to pay for this when it comes due?
Have you worked in the fashion retail business before? The reason I ask is that cash and stock management is so tricky.
Brendan
MichaelDes
Registered User
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- 431
Re: worried already
I assume the margin in shoes is the same as clothes, 2.5 times the net cost price. Taking cuts on margin at sale time etc means you have to sell the last 40% of stock to make profit or breakeven. The first 60% of sales can be the requirement to cover purchase of the goods. The most credit offered to new companies is one month, but some suppliers will do a standing order over the season at even payment amount. For example within shoes there are two seasons, therefore if you buy €30k stock you payback €5k per month. Negotiate with your suppliers for favourable credit terms. Getting shifted of sizes in shoes is trickier than clothes were you only have small, medium and large.
I assume the margin in shoes is the same as clothes, 2.5 times the net cost price. Taking cuts on margin at sale time etc means you have to sell the last 40% of stock to make profit or breakeven. The first 60% of sales can be the requirement to cover purchase of the goods. The most credit offered to new companies is one month, but some suppliers will do a standing order over the season at even payment amount. For example within shoes there are two seasons, therefore if you buy €30k stock you payback €5k per month. Negotiate with your suppliers for favourable credit terms. Getting shifted of sizes in shoes is trickier than clothes were you only have small, medium and large.
Bob the slob
Registered User
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- 394
All my female friends are shoe freaks so if you want I can send them all over to ya