Hello, my co-entrepreneur, come to look @ it, I found out that there is no business transaction that is free from credits; what do you have to say about this?

Doing business on credits


it depends


There are factors that influence doing business on credit such as

  1. Nature of the business.
  2. Presence of distributor/stockist
  3. Type of product/service
  4. Volume of purchase
  5. Discount available to the customer.
    In a situation whereby the customer enjoys special/enhanced discount, full payment should be made.

It’s true, you made a point there


There is nothing that kills business more than credit. So my advice is that before giving out your product on credit, you have to make sure that such Customers are credit worthy.


It depends on the type of business you are into. If you are into retail business your credit facility should not be more than 5% to 10% of your total stock (my opinion).This will at least give you comfort should your debtors refuses to pay or delay in paying.


You are correct to some extent but it is not a standard and depends on the nature of the business anyway.


It depend on how you start it. When once you welcome credit from customers it will difficult for you to end it. Avoid credit customers in your business, because credit kill business more faster than anything.


Mr James, you are very correct. This was my experience in my school business which is still hunting me till today


Well you may be right or wrong but one thing is certain in business you cannot deny a customer who always buy and pay, then if for one reason he comes requesting a credit purchase to pay up on agreed date I don’t think it is nice to turn the customer down especially if you aant to maintain good customer relationship. My take thank you.


It depends on the situation


I say doing business on credit has its own advantages and disadvantages. But before anyone operates on credit bases, one should have details of all the upsides and downsides as opposed to running a business without credit. Getting into the advantages and disadvantages will depend entirely on the kind of business you operate. To conclude, credit is not bad for business :grin:


Good day fellow entrepreneurs like I said before there are business that comes with credit considerations but it must not be amount that will affect the smooth running of your business. Take for instance your credit strength is #10,000 and your business will still remain afloat


The moment you exhaust the #10,000 stop giving on credit until your debtors paid up. My opinion thank you.


In life generally, you either borrow from someone or someone borrow from you. This is also applicable to business and that is the reality.


It depends on the context

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Paabu Adda, Thanks for pointing out the other side of financial coin. Finance is a combination of

  1. monetary side - there networth is measured. Credit - Debit.
  2. fiscal side - here netflow is measured. Fund inflow - Fund outflow.

Not every financial operator is Credit or Debit worthy.

When one takes up debt to consume, then the future is consumed also; but to invest in a viable venture, the future is assured.

When one permits credit transaction to financially irresponsible individual [who may be a member ones families or friends, then the future of the relationship is not even guaranteed.


I think you have to stand before you try helping someone else to stand too. If not the two of you will fall.

For a start up, it is not advisable to give out your products on credit: when your business has matured to some level then you can give measured credit to those trusted Customers who have proven their onions with you and are credit worthy.