Ruth is a sole proprietor who runs a small business that resells quality female clothes and accessories. The business is somewhat a pass time that now turned out to be lucrative; making returns that she knows can be more than what she makes from her regular job if she gives more attention to it.
At some point she decides that the business is ready for expansion and to cut her costs and increase turnover, it was high time she imported the clothes herself instead of reselling.
To import the clothes she is faced with the dilemma of cash in large volumes to pay for the goods. The banking system in Nigeria is not small business friendly and so she looks for ways of raising these funds.
That’s when we recommend she gets and uses a credit card because all she needs for her transaction cycle is funding to buy and pay for the goods and almost immediately sell the goods at a profit and get her payment over a maximum period of 30 days.
The whole procedure of acquiring a credit card, getting travel documents and doing her shopping takes a period of like 90 days but she pays for her goods and gets delivery in the last 15 of those 90 days and even gets all her stock sold out and paid for in 10 days thereafter, so she even completes her payment cycle in less than the 30 days envisaged.
As if the new expanded business and income is not enough joy, the companies she buys her goods from sends her emails notifying her that if she can maintain or even exceed her current business level with them for the next 90 days, she can get the goods supplied to her and she pays after 90 days.
Based on that, it means that she now has current capital funds and twice that in another 90 days to grow her business further thanks to the credit line that will be available then.
BY AYO EMAKHIOMHE
More by next post.
No comments:
Post a Comment