Augusta
VIP Contributor
When it comes to wanting a business that is solid and stand the test of time it is better not to go the route of selling on credit. you might think that's selling on credit will attract more customer yes it might but in the long run you might be ruining the business.
The following reasons should stop you from making credit sales
1. you will be tying down your capital
When you sell on credit you are not only giving out your profit you are also giving out your capital and this means that buying new products might be almost impossible at times
2. running the business on a loss
You might be running the business down because credit sales means that the business have a high debtors
3. lack of money to run the business
Credit sales and money in the hands of buyers might not give you money to run the business effectively
4. Collapse of the business
This will happen sooner than you think because when the business begins to experience bad debt the death of the business will be imminent
The following reasons should stop you from making credit sales
1. you will be tying down your capital
When you sell on credit you are not only giving out your profit you are also giving out your capital and this means that buying new products might be almost impossible at times
2. running the business on a loss
You might be running the business down because credit sales means that the business have a high debtors
3. lack of money to run the business
Credit sales and money in the hands of buyers might not give you money to run the business effectively
4. Collapse of the business
This will happen sooner than you think because when the business begins to experience bad debt the death of the business will be imminent