Business growing too fast

[Jon]

Seems that my sales and marketing has paid off a bit too much... I am
finding that I am growing my business into bankruptcy! We are deep in
debt because of it, and finding it hard to continue. I am now talking
to banks, without much luck. We are not asset-intensive (we build
machinery) - mainly computers, tools, and people.

Has anyone heard of this situation? Any ideas?

[John A. Weeks III]

Post by Jon
Seems that my sales and marketing has paid off a bit too much... I am
finding that I am growing my business into bankruptcy! We are deep in
debt because of it, and finding it hard to continue. I am now talking
to banks, without much luck. We are not asset-intensive (we build
machinery) - mainly computers, tools, and people.
Has anyone heard of this situation? Any ideas?

Lots of businesses have that problem right before they shut down.
It is caused by not charging enough for the product to cover the
cost of making the product, plus a reasonable rate of return. You
need to up the prices at least to the point were revenue is greater
than expenses so income can be a positive number.

Don't look too hard for funding or loans. All more money would
do is cause you to lose more money in the long run. Loans don't
help a bit when you are running behind on every sale.

-john-

[Jon]

Post by John A. Weeks III
It is caused by not charging enough for the product to cover the
cost of making the product, plus a reasonable rate of return.

John, you hit the nail on the head. Exactly my problem, and I assume
the problem of many others. I just hope it is not to late for me to
climb out of my financial hole.

- jon

[John A. Weeks III]

Post by Jon

Post by John A. Weeks III
It is caused by not charging enough for the product to cover the
cost of making the product, plus a reasonable rate of return.

John, you hit the nail on the head. Exactly my problem, and I assume
the problem of many others. I just hope it is not to late for me to
climb out of my financial hole.

The obvious solution is to raise the price to cover your costs
and generate a reasonable profit. Once you do that, is your
new price still competitive in the marketplace? If not, then
perhaps you do not have a viable business model.

Anyone can open a business and sell product when they are running
at a loss. Making a fair profit and selling is far, far more
difficult. In fact, many US businesses have found that they
cannot operate in the US anymore and be competitive in the global
market. An example are electronics makers. They all went overseas
years ago. Even the custom board makers have all left for the
most part. Another example is airlines. So many airlines are
running bankrupt that for-profit airlines cannot compete. The
whole industry is teetering on bankruptcy.

-john-