batman1117 wrote:Hi ksl,
We are in gift business. As you aware it has short life span and also need news ideas to attract customer. Due to cash flow problems, so companies do not have any injection of new products. But overhead is fix due to rental and wages. That why business is dropping on sales and profit due to slashing on price to get sales....so basically this conclude why business in loss.
However, we believe having new products line maybe will improve on the sales. But question is present crisis, what is the percentage risk taken on such situation? It will be on high risk. Will it sensible to borrow more money to continue with this business? Or stop the business and look into other business options. Any chance able to sell the business during such circumstances?Thanks
Gift business, yes I'm afraid it's a bad time, and yes, you probably need to change direction into retailing something else, depending on your location and a few other factors....if you go bankrupt, you will not be allowed to start up again in the owners name for a period of time, I think 5 years, or until all the debts are cleared.
Not sure of the legal side, but SE may know more on that, although as i say, depends on a few other factors, if you should close shop...or if you should loan to reinvent your product offering, needs to be evaluated from scratch with a breakeven point to see how long it's going to take you to get out of the mess, without loaning more money if possible.
You need to be looking at cutting costs and inventory as well as knowing how long it's going to take to clear the debt you have. Basically you will be starting a new business with a new range of products, you can still remain in the gift industry if you choose the right products.
If it's corporate gift shop or tourist shop, one thing is for sure, it's a bad time, and the chances of survival are dim, based on your fixed costs, although you can minimise your high risk position, by doing your home work, to discover which businesses are not effected by the slump in consumer purchasing.
Think about it carefully, and ask yourself, where do you cut down your own spending, and where do you not cut down spending in a recession.
Everyone is different, yes, but their are products that are still in great demand, do you think consumers have stopped training for example, or stopped looking after their health? Always have a strategy in times of a recession, or heavy competition part of business planning to minimise risk.
If you have been around for 10 years, you may have a good loyal client base, which maybe of value to you or someone. Let me know your location if possible, shopping mall or other.
Is it a family business, how many employed ? what's the rental?