Jul 11

How Save Is Your Business From Creditors Owing Too Long? ii

credit selling 2

In the last post we share some points about selling on credit. and we said, for us to succeed in business we have to go against selling on credit. If you haven’t read it, go and read it here

Now lets talk about some causes, effect and solution of selling on credit

are you ready?

lets take off

Causes Of Selling On Credit

i- IMPATIENT: This happen when a commodity is becoming too grounded on the shopping floor. We think of how to get away with it in other not to be stucked because its tying down our money. This leads to the buyer sensing the unsecured feeling of the seller.

ii) OVERSTOCK: Every ventures is operated on certain principle. 80% of your profit will come from 20% of your product. The remaining 80% of the product only yield 20% profit. Many people stock more of the 80% product that yield 20% profit.

iii) TOO MUCH PITY: concession is good in business but there must be reasonable boundary. We do business with an eye open and the other closed. If the pity is too much on your customer, it will lead to self pity at the end of the day.

iv) FEAR OF LOOSING THE CUSTOMER: The old saying holds true “Customers Pay Our Salary”. Also “Customers are Almost Right In Some Situation” also holds true to certain extent. But what we fail to know is that Customers are not equal. Certain Customers are worthy than the other. Infact, the principle above also holds true. 80% of sales comes from 20% of Customers.
Instead of trying to waste your effort on all customers why can’t you filter the good ones and establish quality relationship with them instead of trying to embrace a fallacy approach.


Anything that has causes must reasonably create an effect. There are a lot of threats to you and your organization by selling on credit.

i- You risk high chance of loosing customers when you sell on credit because there won’t be anything to sell to those that has cash.

ii- You are risking the probability of closing down the business because there will be no reserve

iii- You risk the chance of loosing loyal and hardworking staff.

iv- You are rubbing peter to pay Paul because the credit outside might be enough to settle the bills.

v- You are discharging inefficient Management System.


i- You have peace of mind as there will be more than enough reserve to pay the bills and other expenditures.

ii- You will satisfy your conscience if par-adventure the business fail. You won’t have guilt feelings over anybody.

iii- You are establishing a legacy that will outlive you. The customers will have known it for you and keep up with their promise.

Solution To Selling On Credit.

As an aspiring entrepreneur, we need to know the parable of business and apply it. From this point on, you will benefit from mental shift and activate a new reality of business. 80% of our fear do not appear as the word stands as an acronym for False Expectations Appearing Real.

What we fear at the end of the day consume us. If we fear not to loose the customer, the aftermath effect is mightier than the fear itself because when Amortization piles up too much, it becomes impossible to pay by that customer.

The probability is that if he has little money, instead of him coming to pay the old debt, he will surely go to your major competitor and buy from him with the cash on his hand. Then you end up running after him or wipe off the debt and count as bad debt. Instead of that, why can’t you employ this two basic approach:

(a). MEDICAL APPROACH– Everything human being buys is his/her priority. But the sad news is that we put Posteriority over Priority.

In hospitals, when they rush a patient in, the nurses will show some care by welcoming him and give him first aid to survive for few hours. They then tell the relatives to look out for Money. If the money is not complete to 40-50%, there is no commencement of treatment.

You will think they are so mean and sordid but are also in business to make money. Not a charity organization.

b) CHEAP PRODUCT/SERVICE: It is inherent in all human being to patronize cheap service or buy cheap product. Why can’t you do your home work very well and come up with cheap service that people will cue to buy and put some Unique Selling Proposition to spice it up. Believe me Money will roll in millions instead of EXPENSIVE AND CREDIT APPROACH.

We cannot possibly do away with selling on credit in business but we can alleviate it to the barest minimum. Are we not in business to make money. If you have someone you bequeath some fortune and at the end of the day he come back to tell you that he has closed down due to CREDIT

How will you feel?

Will you feel happy?


Why are you going against yourself?

Why are you going against the age long principle that works?

After all the basic principle of human action is that everything we do is aimed at improving our life in some way.
Let’s embrace the principle and succeed in business.

Shall we?



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A Writer, Serial Entrepreneur, Difference Maker

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