Recently, we saw the final demise of Blockbuster and then Barratts and now we have seen Tie Rack become the latest victim as another well known name to disappears from the High Street but as in the case of Tie Rack it is disappearing from train stations and airports.
The question that should now be considered, is whether you pull the plug now or leave until after Christmas? Christmas is normally a season of goodwill but with most retailers having to pay rent around Christmas for the next quarter, this is a not the “Season of Goodwill”. Yes they can trade and produce sales to satisfy your customers but the main thing that is missing is two KEY parties – the staff and the suppliers!
You have a bumper Christmas selling all your stock but then, even with all these excellent sales, it is not enough to cover the following quarter’s rent payment, so the only option is to close the business. A good choice it maybe said, but how can it be? This decision means you can’t pay the staff wages – so no goodwill here at all, especially just before Christmas or in between Christmas and New Year to inform staff they have lost there job and won’t get paid! The other party is your suppliers – they have provided you with your stock which you have sold but you can’t pay them! So they will not receive their monies they are due but may have paid their suppliers (or may not have) yet can they afford to cover your inability to make payment? In turn you could be doing the same to them, it could send their business under and in turn their suppliers and so on and so on……
So when do you draw the line? When is the right time to say enough is enough? There is never really a right time but you can make a decision now to try and cushion the blow which may be a bit calmer and less upsetting……
Take a look now and do the following:-
- Have you enough stock for the whole of December and January?
- If not what do you need?
- Do you have the money now to pay all your suppliers for what stock you have now (and what you may need for December and January)?
- Your staff – do you have enough money to pay their wages for this month, December and January?
- Now if you don’t have the money to cover the suppliers and wages to the end of January – how much are you short?
- The shortfall, will your sales from now until the end of January cover this shortfall?
If your money in the bank and your cash reserves together with the money generated from your sales, can meet the payment of your suppliers and staff – then you have kept your business trading until the end of January. Now for the main question…… HOW MUCH MONEY IS LEFT??
Will this money cover the rent that is due at Christmas plus your final Business Rates bill? If the money is not there – then, with just under five weeks until Christmas, can you really spend that time leading your staff and suppliers into the false sense of security that you are going to be around after New Year’s Eve?
With eight days left until the end of the month, the time has now come to make that decision – can you cover suppliers, staff, rent and business rates in that order? If not, make the decision now before the end of this month, as help maybe there for you…..
If you need help now, making the decision to ask for help before the end of November is the right thing and time to do it. If you leave it until just before Christmas, the banks and other options will not be able to be investigated until after the New Year and that leaves only one route – closing the business or calling the receivers or administrators in, is the worst thing you can do not only to your suppliers but your staff too….
Whether you are reading this today (Thursday 22nd of November 2013) or at a later date, this article is something that is valid at time around the six week period leading up to paying your rent; but it still so important in the run up to Christmas….
Please, have a look and do consider the next step as how would you feel if you where in your suppliers or staff’s position in the run up to Christmas…..
News articles above taken from:-