Why Did a Popular Local Business With Tons of Customers Fail?
One of the major reasons that small businesses fail is from a lack of working capital. Not having enough working capital leads to a myriad of problems, including an inability to buy as much inventory as needed.
One business owner told us the story of his Kentucky-based arts and crafts store that failed due to a lack of working capital. Without it, the owner said he was often short on inventory, which led to unhappy customers.
It was a problem he recognized early on. But he felt stuck, telling us that he did not have the money to buy the inventory to support demand. It ultimately led him to close his store.
If you’re a business owner in a similar situation, there is a perfect solution that can help prevent you from closing up shop.
Thousands of business owners use Plastiq to pay for inventory purchases, rent, and everyday business expenses using their existing credit card. And you can use your credit card for these expenses regardless of whether your supplier accepts card payments or not.
Being able to float out these expenses enables you to have more days of cash float and increases your ability to sell your inventory before needing to pay for it. In the case of this arts and crafts store, this business owner could’ve used his credit cards for leverage to buy more inventory to meet demand, then turn around and use the profits to build working capital.
If you’re in a similar situation, click here to learn more about Plastiq and sign up for your free account today!
Editors Note: This story is a part of an ongoing short story series taking a look at why businesses fail and possible remedies.