Starting a new E-commerce business and keeping debt at bay

If you are an online entrepreneur and have just started off, aside from the many other aspects that you must take into account, your finances matter the most. This is because going ahead with a start-up, regardless of whether it is an E-commerce website or a brick and mortar store, you have to plan out your finances and allocate funds depending on the financial obligations that you must fulfill.

As such, if you are sound in this sphere, it is like you have almost won half the battle already. However, not all E-commerce website owners are lucky enough. And this article is for them. It is not just about meeting financial obligations, but many a time you might step on to uncertain grounds that might force you to get into debt.

So, the write-up will mainly highlight the following aspects related to debt and E-commerce business, namely,

1. Start an E-commerce business but how not to get into debt
2. How can an E-commerce business fight debt?

Let us take each sub-topic one by one.

1. Start an E-commerce business but how not to get into debt

It can be safely said that starting an E-commerce business means that you have done due diligence and have all the relevant information at the tip of your fingers. However, for better implementation of the business plan and to make the business model work well, here are few measures that you can take-

• Adopt the right action plan

Draw up a plan that will present graphically all your monthly expenses, which will include operation costs, hiring expenses, the strength of employees, expenses that you have to incur on client communication. You have to stay connected with your clients. And communication is key. So, how much will you spend on server hosting, email, VoIP services, online chat, and so on.

• Try to curb bounce rates

Studies reveal that approximately 60% of customers leave the site if they do not find a product of their choice. Have a wide array of products and services at your disposal.

• Conversion process optimization

You will observe that many customers will add stuff to their shopping cart but “abandon” the cart when they have to make the payment finally. It is a major cause of concern for all E-commerce websites. Offer incentives for reducing such instances.

• Start at a slow pace

There is a phrase “Slow and steady wins the race.” When you embark upon the same, do so at a slow pace. Do not rush into making profits in the first quarter itself. Observe how things are progressing and change and readjust your action plan to suit the prevailing condition of the market.

Remember, there is no “umbrella” solution for your business. It has to be according to the demand of the consumers.

• Keep track and monitor every expense and earning

Even if it is a few dollars, make a note of it. Do not go overboard with your investment. Try to reinvest if possible. Do not expect profits till the time there is no break-even.

• Seek consultation from experts from time to time

Every corporate stalwart has professional advisors and consultants that guide them to stay abreast with the market conditions and to be financially sound and safe. If you cannot afford to hire the services of one that charges a very high fee, approach someone who can offer services at a lower fee. The right guidance and at the right moment can help you go a long way.

Even if you fall into debt, there are so many debt settlement reviews that can help you to select the right approach and company for getting out of debt, in case you cannot avoid it.

2. How can an E-commerce business fight debt?

No matter how hard you try, there may be times when your finances might dwindle, and you are forced to get into debt due to certain unexpected financial expenses. So, it is best to prepare yourself beforehand in the event you have to tackle this problem too.

Under such circumstances, you can take the following measures-

• Do not get into debt

First of all, avoid getting into debt. Steer clear of all such activities that will force you into debt. Although, it is easier said than done but try it if you can.

• Increase the monthly debt payout

Once you are dealing with debt, it is likely that you are making monthly payments to a creditor or creditors. In order that you are out of debt faster, if possible, increase the amount you shell out as debt payment every month to buy lederhosen. In this way, you will not only be doing away with the principal amount but also the interest amount faster.

• Assess debt accounts

It is applicable if you have more than one debt account to handle. Pay off the outstanding debt balance that attracts a higher rate of interest. If you are finding it difficult to keep track, take one debt account at a time and finish it off. The only thing you have to keep in mind is that “attack” the one that has a higher interest rate, as mentioned above.

• Debt settlement/negotiation

It is best to talk to creditors and arrive at an outstanding balance that will lower your burden. Most of the creditors agree to come to a settlement. And if you have an impressive credit report, you can win over the confidence of the lenders.

They will agree to work with you by offering terms and conditions that will benefit you too.

• Building an emergency fund

It is always advisable to make an emergency fund for the rainy day. It usually does not grow overnight. In fact, you must start building the fund long before you even conceive the idea of starting an E-commerce business.

It is basically a fund that you can fall back upon in the event of a financial crisis. It allows you to tackle the financial emergency from your own available cash instead of turning to an external source for availing financial aid in the form of loans.