Forums: Discussions for entrepreneurs and small business.

 

Hello all,

What if you had an established retail business with a good and loyal customer base that was shrinking? Expand across the country with an ecommerce website.

For us, that seems to have worked pretty well. The trouble is as store traffic has shrunk and web store sales have replaced it, we have simply survived. Add in the current depression-ish economy in our town (Detroit), a weather related awful 2nd quarter, and you have a real case of the cash flow blues.

Something like $x incoming = $x outgoing - How do we get out of this?

We have a mortgage coming up and all we ever seem to find is a 5 yr term with a 15 yr amortization at about 8%. It seems like all we pay is interest, good for the bank, no cash flow relief that way for another 20 or 30 years!!

This is truly a small business, 2 owners, 4 employees, less than 1/2 m per/yr. We want to push that website like we know we could if only we had the money to do it.

Can't we sell our debt? People are lucky to find 2% interest in a CD these days. I haven't found anything very specific about selling company bonds in a business our size so I'm here to ask.

I'm not talking about the public bond market,  that all sounds very complicated. I'm wondering if it's legal to do so privately.

Any suggestions or comments would be much appreciated.

 

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Sure you can sell bonds - find an underwriter and let them get work.  You could even work with your local city government to issue bonds.

The problem is that with limited and declining or flat cash flow - would anyone buy your bonds?

Your issue should be more about growing revenue and eventually growing profits.

Where can you cut back and still earn the revenue you are now?

Where can you increase revenue?  Have you thought about oversea markets (the SBA with the EX-IM bank) has many grant and low-interest programs for businesses looking to expand overseas.

You also should be looking at your customers.  Why are they not buying like they should and where are they buying?  You seem to have a mis-match with your customers.  Talk to your customers - they just might tell you want is wrong with your current products or tell you what products they actually want to buy.  Much better to provide what they want then to try to push something on them they don't want.

Find a SCORE office in your area.  They are free to use and can help you develop a better marketing strategy.

If it is just capital you need, we have a free searchable database that can get you started in the right direction for lenders and other resources that offer more than 5 year terms with balloon and that want to work with businesses like yours.

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