As business owners i am very sure we might have come across persons who have either bought credit from us before or tried to. I came across a topic where someone asked if it was wrong to say no to credits, personally i believe there is notting wrong with that. It is your business and if you start allowing credits, it could lead to the fall of the business.
Saying no to credits
- Thread starter eldavis
- Start date
You would have to state it to all your customers and explain to them the reasons for such a stance. Be firm and consistent about it with all the customers and make sure you don't shift ground for any customer because news has a way of going round and it would be like you prefer some customers over others.
I had run a business with a credit system, but in the end I closed it because many customers found it difficult to pay, I closed it because I didn't want to bear more losses. Now in my business I don't serve credit, so I think it's much better, capital can rotate smoothly as it should.
- Thread starter
- #6
That's the issue with things like this, you might want to setup a credit system to make things easy for them but they themselves would not play their part. By the time you stop giving out credits they would say you have changed.
Yes you are right, but I don't mind being called a cheapskate, for not giving them credit. Instead of me continuing to lose money, because they don't want to be responsible for paying their debts, it's better for me to just ignore them.
This could be a very difficult call to make but it requires that the business person should be firm in the decision. Debts have run down so many businesses and make them go bankrupt.
It's very important to know that the customers you're going to sell your products to are reliable and trustworthy to pay when they are supposed to.
I think you should accept credit for only a specific number of people who you trust. That trust is only built after they have paid back some of the money. If someone has ever defaulted, you have a reason to never trust them.
Even though credit is part of business, it is not always advisable. I always tell people that they should not even start the credit thing. It is not always healthy for a business.
I once went to have dinner at a food stall where I subscribed but when I wanted to pay I didn't bring money because I left my wallet behind, I tried to leave my watch as collateral, but the seller said. No need for guarantees, he believed me and the next day immediately i paid.
If you are doing retail business, I think it is not advisable to offer credit to customers. You may accept credit cards. But if you running a trading business, it is difficult not to offer credit to a business customer. You may accept Letter of Credit.
As long as you have been able to establish a strong trust and confidence in your customers, I believe that you stand a very good chance of running your business on credit facilities with that particular kind of customer.
From a customer's point of view, it is very difficult to pay for a product whose utility has already been derived. That is why credit sales are not good practices and should not be encouraged in business.
Yes, that's how it is, but unfortunately there are many credit business transactions here, ranging from clothes, furniture, motorbikes, cars, even houses. Even some vehicle dealers will make it difficult for buyers who want to buy it in cash, because they want credit in order to get high profits.
- Thread starter
- #20
Yes that's true, but these days you can't even trust anyone. With how the world is going, it is becoming very hard to trust. I have seen cases where in the end the customers refuse to pay even the ones you thought would pay.
