leaving business school I moved back to my home country and started a retail
business with money from family and friends. I had taken classes in finance,
operations, retail management, and two in entrepreneurship and had done very
well. I felt well-prepared.
a bank account in my home country and started importing stock from the US and
China. Sales went really well for the first 6 months. Then the economy started
to slow and my sales also slowed. Inventory started to build up and the store began
to look bad with stock from different seasons and odd sizes and colors piled up.
I had 30-day
credit with my suppliers but I had to place minimum order quantities. The rent
had to be paid at the first of each month and the shop staff were paid every
two weeks. I did not want to reduce the margins as this would affect my profits
even though everyone else in the shopping area where offering 40-60% sale
planned to have 45 days of cash in the bank but with slow sales, suppliers’
payments, salaries and rent, I found myself caught short. I had piles of stock but
less than a week’s worth of cash and I could not pay the next month’s rent. By
the time I decided to cut my margins and liquidate my stock, it was too late. I
had to borrow more money from my family just to stay afloat. It took me 10 weeks
to recover and over 6 months to get my credit line back at the bank.