I must be ancient:
When I started out with my business in confectionaries about two decades ago, one thought that kept troubling me all the time was how on earth I was going to be able to manage the working capital in the business. I had saved a little when I was working to be able to start a business but I had no means of keeping it alive. What I needed was a constant stream of working capital because I knew too well that the food industry is a fickle one. Things that click instantly go down the hall of fame and the rest either stagnate in mediocrity or are eliminate upfront say in the first six to eight months itself.
There was nothing that I wouldn’t do to save my business:
I looked up everywhere to get loans to sustain the business. I thought it was easy to think about avenues in the beginning than to search high and low for respite. Surely, this was one thing that I didn’t want to cross over only when I came to the lake! I wanted to be prepared for it even before any eventuality occurred.
So, I approached banks and realized that there was a long queue already. Add to that the processing fee was so high and the time frame that they quoted for processing seemed surreally long. How could I even think of keeping afloat for six months while the loan was being approved?
Here is a list of challenges I faced way back:
- The processing and approval time was too long:
Getting the papers ready and the credit score card checked along with the requisite formalities took exceptionally long time. I tried to explain to them that my business was mainly of perishable food items and by no means could I afford to have a longer incubation period but it all fell on deaf ears. I had to go through a really long period of downsizing stock and delaying my interior work which I think has affected my business in some major way.
- The interest rates were hiked periodically:
Much to my chagrin, the interest rates on my loan were hiked periodically albeit even after notice. But it was out of bounds to expect sales in my business to increase by leaps and bounds overnight or even at a short notice of time.
I managed to pay the loan in about two years with a grace period. It was a time that I understood that it was better than I improved my sales to be able to meet my working capital needs than stand in long queues to get a loan sanctioned!