In 18 months I've gone from solvent to almost broke - need major HELP!

downhillfast · 6 December 2006 at 5:04PM

Hi All!

Where shall I start..? Well, 18 months ago I started on my dream.... moved into my first pub and my first business (before this I had had a great career but was made redundant and promised myself I would never work for a major corporation again!) All the business plans and everything I had compiled looked great... the banks were impressed and funded me the 50% of the cost of buying the business (£43,250 of £86,500) I had £20k redundancy, and had sold my house, freeing up £40k equity....THAT'S WHERE IT ALL WENT WRONG - BIG STYLEE!

18 months on I now find myself with massive debts - both personally and on a business level. My personal accounts are both in the red to a tune of £4k (as I have never drawn a proper wage from the business)... the business accounts are in debt by about £2k - no arranged overdraft! 6 months ago I managed to borrow (cringe) a further £19k from a mixture a family and banks (for "personal" use) Big mistake, but at the time I was convinced that the extra capital input would help float the business again until things turned around a bit - the world cup was looming and it was looking like we were in for a scorching summer - the pub has a fantastic garden that attracts many people when the sun shines. As it stands now, my DDs are bouncing here there and everywhere, the VAT bill (about £3.5K) is due end of Dec, morally I feel pretty worthless and ashamed... sleep isn't easy as I daren't even add up how much my total debt is! The ostrich approach is wearing thin thankfully and I have put the business up for sale - which cannot come quickly enough I don't think - these things take time and that is one thing I don't have (and with the business in trouble it may not reach anywhere near the asking price!
Yesterday I found out about the "reclaiming bank charges" thing and it has urged me on to get a grip and try to sort things out - but have I left it too late.... BANKRUPTCY is a word that has been flying around my head and rattling alarm bells for months but up until now I managed to hold it together....

I've cut back on everything I can personally and in the business - hence I work all but 2 shifts on the bar - and even then I'm around hosting various competitions and quiz nights to draw more custom.

What is actually gonna start happening when the bills aren't paid again and cash flow stops altogether??? All I know about bankruptcy is that if you have assets they get sold off at a pittance?

Have I really worked my whole adult life for NOTHING? The business is the only thing I have that is worth anything - and it is also my home.

Typing all of this is making me want to burst out crying - so I guess this website is quite Cathartic!

Any advice would be SO welcomed?

TIA

Storm · 6 December 2006 at 5:13PM

Ok hon, breathe, you're in the right place.

The first thing to do is post a SoA (see SouthernScousers sticky) with all your incomings & outgoings.

Obviously as you're working for yourself the incomings are difficult, but try an average over the last few months.

Running a pub seems to be a tricky one money-wise as it takes time to build up regulars, and they only have so much money to spend! I know there's some others on here who've been in the pub game so they may have some practical suggestions.

Welcome to the boards :hello:

melaniec_2 · 6 December 2006 at 5:22PM

Have you spoken to your small business manager at the bank, can they give you some help and advice, review what you are doing?

Are you attached to a brewery do they have a trouble shooter that can help?

Just some ideas hopefully some one from the industry can help you further.

GreyPilgrim · 6 December 2006 at 5:26PM

Can't really offer any help mate but I'm sure you'll get some. It seems like this is more of a problem of making your business profitable. Sorry for stating the obvious - what I mean is that cutting back on all your personal expenditure is a start but if the business itself is running at a loss then thats the real issue.

As Storm said, there'll be people on this forum with real business experience who may be able to offer you some help.

All the best.

GP

rog2 · 6 December 2006 at 5:35PM

Hi DHF - Just a few words of support as your situation sounds very similar to the situation that I found myself in two years ago (slightly different numbers). At that time I did not know about this forum and am totally convinced that, had I come here when the problems first started, I would have a different signature now.
You are in the right place - post your SOA - have a look at the other threads andjust wait for the advice.
Good Luck.

downhillfast · 6 December 2006 at 5:36PM

Thanks for your replies.

Both the bank and the brewery know that the business is struggling - have had overdraft facility refused months and months ago when the business was in better health than it is now - they don't seem to care.... infact they suggested getting a loan from somewhere (not them) to help with cashflow!

As for the brewery - they are a joke. Try to squeeze every penny out of me at any opportunity. They are fairly good regarding me having to pay the rent and beer bill in installments... but they are offering no help to help me sort things out.

IMO pub companies are just money grabbing cowboys!

saintly_2 · 6 December 2006 at 5:36PM

hiya

sorry to hear about your situation, it must be hard.

my boyfriends parents ran a pub that was always busy, they borrowed money to try an keep it afloat and both had full time jobs as well as running the pub. However July this year things got too much for them and they were in debt big time. They decided to go bankrupt, it wasnt an easy decision to make and there were plenty of tears, however they have now said its the best thing they did was to leave the pub and declare themselves bankrupt. My OH dad won a fortune on the horses and they lost it all in the pub. The bailiffs were called in on their last day as the brewery thought they were going to take things from the pub to sell, the bailiffs said that 4 pubs a week were struggling to survive.

I know this prob isn't the best story to read and i'm very sorry if it upsets you, all i wanted to say is there is light at the end of the tunnel, be strong and you can get through this.

People on here will be able to give you some absolutely brilliant advice and good luck with claiming back the bank charges

xx

Xbigman · 6 December 2006 at 5:36PM

Have you had the business valued? If you sell up and get out how much do you need to break even. Did you own the building or was it leased?

As long as the business is worth something you should not need to go bankrupt, although you might come out of it owing money. Once out you can get a job and get your life restarted.

Regards

X

reecos · 6 December 2006 at 5:42PM

Sorry to hear about your problems.

I spent 17 years in the licensed trade and know how hard it can be, I always worked for breweries or pub companies though so this limited the stress during the hard times.

In my time in the trade I took over quite a few under performing pubs and turned them into profitable businesses, its all about finding your place in the market.

Is there anyone in the trade that you can turn to for help or advice, if the business could start to return a good profit things wont seem so bad and you can start making a dent in those debts.

Where abouts are you located?

downhillfast · 6 December 2006 at 5:53PM

Making the business more profitable is definitely the best way forward.... I have tried everything I can... the pub is one of 3 in a small village and has had a stigma attatched to it for a while I now know! I'm already the most expensive, so increasing bar prices is the very last resort.... and as for a happy hour to bring in customers - that would be a death sentence as I know for a fact that the only time anyone would drink in here then would be when I was giving it away!
To be honest I'm sick of the life here too... no money, no time off, no privacy... I'm sick of being gossipped about!

I want out, but I want to come out with some pride and at least some money to start my life again somewhere.

reecos · 6 December 2006 at 5:59PM

I can relate to what you're going through mate.

Although all of the pubs I ran were profitable (at least by the time I left them) and I didn't have any stress to money related matters I got fed up of the hours I put in, regulars who all think that they know how to run a pub and think that cos you're the landlord you're life is fair game for pub discussions and the fact that it was so hard to get away from it all.

Where abouts in the Uk is your pub?

In 18 months I've gone from solvent to almost broke - need major HELP!

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