Credit Control ( or lack of on the small accounts)

[Viking]

5 hours ago, JDDavao said:

My wife once stayed with a pleasant relative on a pleasant tourist island here. The relative owed money to every sari-sari store within a mile of their house. The relative finally had to borrow money from four or five people to pay her debt at one store so that she could go into debt again. I've no idea if or how she paid back those she borrowed from.

I guess businesses, like friends, are just "supposed to understand" ?

And as long businesses and friends understand, there is no reason for them to change their behaviour 

[Jack Peterson]

1 hour ago, Jollygoodfellow said:

Seems to me no one was steering the ship if it comes as surprise of money owing. 

 They were not but they are now believe me

[Gary D]

5 hours ago, hk blues said:

And that's not taking into account the amount of capital invested in stock. I often wonder how such businesses survive.

A lot survive on OFW remittance. So whilst money comes in any profit is not a consideration.

[hk blues]

12 hours ago, Gary D said:

A lot survive on OFW remittance. So whilst money comes in any profit is not a consideration.

I'm not so sure, they need cash flow to buy the stock and if they are using the remittance to buy the stock then that's less money to spend on other expenses. 

[Arizona Kid]

On 8/27/2019 at 10:30 AM, graham59 said:

I thought this was 'standard procedure' in the Phils  (regarding money borrowed as a gift).

That is why I never give credit here (in other words LEND)... don't care who it is. 

If it is an emergency, that directly affects ME, then I will donate, not lend.  Saves falling out with people. 

I don't care if people resent me for it (though I'm not stupid enough to make anyone lose face) .

I spent 50 years working hard to earn my pension, and I too have a family to support. 

If some fit young man with 6 kids is in need, then maybe he should buy some contraceptive pills and condoms.   

Haven't seen my ex bro in law for over 10 yrs. I lent him P1,500. Best money I ever spent.

[JDDavao II]

On 8/27/2019 at 6:43 PM, Mike J said:

I think many people who open small businesses don't have real world view of how profit margins work when a debt is not paid.  There are so many Sari Sari stores that profit margins are very small due to competition.  Let us assume 5% margin for the sake of argument.

So you buy 1 liter bottles of adult beverage for 95 peso, and sell it for 100 peso.  Your profit is 5 peso each bottle.  Not great but if you sell 20 of them, you have 100 peso profit and you can buy rice for your family.  Sell 19 for cash and 1 on credit and what happens?  Until you get paid, assuming you ever do, your net profit for those 20 bottles is ZERO.  But, often enough, store owner may still feel like they had a good day because there is 1900 peso in the till.  Do that enough times and the Sari Sari store becomes a Sorry Sorry I ever opened the store.

I'm not sure at all about ongoing support but my wife has told me that the government will contribute program money if you open certain kinds of businesses. That's why, I think, there is the phenomenon of five sari-saris and four auto wheel shops next to each other, across the street from the four furniture makers and three rattan shops next to each other.

[hk blues]

5 hours ago, JDDavao said:

I'm not sure at all about ongoing support but my wife has told me that the government will contribute program money if you open certain kinds of businesses. That's why, I think, there is the phenomenon of five sari-saris and four auto wheel shops next to each other, across the street from the four furniture makers and three rattan shops next to each other.

Not sure about the other shops/stores you mention, but I reckon most of the sari-sari stores are unofficial and unlikely to receive government support.  It seems that way around me anyway.