Yes, that’s right. Once you’ve opened your new business and got it off the ground, you can use this method to expand without having to run to the bank to borrow money because your customers willingly give you all the money you need.
Let’s assume you’re a butcher. In that case, this is how it works:
Offer your customers two payment plans: in the first, you charge whatever you choose for (let’s say) chicken but whatever your customer wants, you tell them to come back tomorrow to collect a quarter of their order, two days later for another quarter and next Friday for the rest.
Now I know you’re all saying I’m mad and no-one would pay you in advance for something that you won’t use for a week or more. But I can assure you that so long as your “chicken” is tasty, they will; particularly if you offer enough gimmicks or promotions such as “buy two for the price of one” to hide the fact that you’re charging substantially more for your “chicken” in the first place.
Offer a seriously better price to those who are price conscious enough to have noticed that in “Plan A” you’re charging a lot for your chicken and even tell them that they can have all the chicken they like and pay you at the end the month so long as they lend you, before they collect any “chicken” enough money to cover twice (yes, I did day twice!) the value of what chicken you think they might take in that month.
Under this “better” plan, anyone who might, throughout a month, collect and eat $50 of “chicken” has to lend you $100 on the first of the month before they collect any “chicken” and who can only get that back if they promise to never buy any more “chicken” from you again!
Now you can see how, with a little bit of thought and planning, you can get your customers to pay you for something they are not going to use for at least some period of time or, if they think a bit of credit on their purchases from you a good idea, you get from them right at the beginning, twice what they think they might want to spend.
Not a bad way to run a business, don’t you think?
Now, even I realise that, as a butcher, this is never going to work. I have used a butcher simply as an example and that’s because anyone with a little bit of knowledge can become a butcher but there are businesses that it will work with; those where there is not much competition for one reason or another and one very good reason is where the businesses in that marketplace are restricted because they need licences or permissions from our Government.
If there is anyone out there who would like to try this “new” business method then I would suggest further study would be appropriate. First off would be to visit the offices of both Flow and Digicel and collect any information they will give you on their “plans” and how they operate. On how they get all of their cash up front because, in reality, there is no competition in their marketplace as they are the only two in it.
Then either open a business yourself and copy their methods or write to Apollo Knight (in effect the state telecoms regulator) and complain and suggest he does something about this pernicious practice.
The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to [email protected]
The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to [email protected].