Home – New Forums Starting your journey Start up Financing and Retail Chain Questions

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  • #979358
    sjc123
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    Hi everyone,

    I am in the midst of being awarded a contract to distribute a a sports product in Australia. The product offers a great innovation in a market where there has been very little innovation in the past.

    I have a few questions that someone may be able to help with.

    I am a young entrepreneur so i don’t have anything to secure loans with so financing is an issue for me.

    If a large sporting goods retail chain plans to order a large quantity, would a bank then be inclined to provide the loan i need to order the products in to resell since i would be able to prove that there is a revenue stream large enough to pay them back?

    What is the terms of payment like with large retail chains?

    That’s all i can think of at the moment :) Any help would be great.

    #1113797
    AGMBris
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    Hi

    Yes it is a tricky situation. Sounds like a great opportunity that would need asset backed security to get the finance to take off.

    The banks are not too keen to lend without security especially for commercial purposes and that could be difficult. Not too much lending based on cash flow nowadays unfortunately. I guess if you had definite contracts in place from a customer like a sports chain they may be interested but I suspect asset backing would still be required by the banks. Do you have residential equity that you could release and would you be prepared to risk personal assets? Alot questions I guess but you never know, some of the smaller finance companies may help you.

    Perhaps private investors could be the key or can you start at a small level and build as cash flow allows? Would the supplier be interested in supporting you or is it all or nothing for them?

    Can you pay for what you sell? ie will they allow you to order what you have already sold so you can have cash in possibly through pre-orders?

    #1113798
    Jodie McLeod
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    Hi sjc123,

    Welcome to the Flying Solo forums! We have plenty of retail business owners hanging out around here who I’m sure will be able to lend a hand with your retail questions.

    As for financing, this page on managing finances could be of some assistance – there are a few guides that would be worth a look.

    Also worth a look are our forum guidelines when you get a chance.

    Good luck getting your business off the ground!

    Jodie

    #1113799
    Chris – Marketing
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    do u have a good history at your bank? do have a family member who could guarantee your overdraft/line of credit? Have you tested the market to see what the reaction is to the product, Quantity & market price? Will your future clients be prepared to pay a deposit? What terms are the sport company offering (120 days would be best)? Is the sports company supplying all your marketing flyers? What do you need -Accounting software, vehicle, phone, laptop, Storage unit or office space…etc?????
    all of these answers and many more will help formulate your pathway forward.

    It sounds like you need a business partner. To obtain a good partner you need a business plan. Talk to your accountant and lawyer they may have people waiting.
    Just remember that you have to move quickly as others will catch on. In 2004 it only took a few months for Micro Fiber to saturate the sports market (Track suites). I was manufacturing for the NBL once worn by these boys everyone wanted micro fiber.

    Good luck there are investors waiting especially in the sports industry. A lot of cashed up ex-competitors.

    Chris Poulios
    http://www.satisfaction-marketing.com.au
    http://www.webthreads.com.au

    #1113800
    sjc123
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    Thanks for the input, you raise some good questions. Unfortunately i have no way of securing finance. So i have thought it over and i agree, a partner or investor/mentor would be a good way to go.

    In saying that, I am assuming that having a track record of sales in Aus would make the investment more appealing to the potential investor?

    Also, if the large retail chain agreed to stock the product, which i think is highly likely, but i require an investment to fulfill the order, would this be in my favor?

    #1113801
    Cjay
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    • Total posts: 183
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    Can you get the supplier to charge after receipt of payment from retailers?

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