Self employed and in debt

OberonSH

Hi all,

I'm in a bit of a strange position, as I have debt but not on credit cards and have no fixed monthly income with which to make budgeting easy. My husband walked out at the New Year, and I've decided to take the bull by the horns and get the finances sorted.

I own a craft shop, and as I'm trying to build the business up I not only have debts with the shop (set-up loans) but also personal debt. I take drawings wise what the shop can afford to give me, which isn't much atm. I'm looking for some support and advice as I'm feeling a bit isolated, with not having fixed amounts of money to chuck at my debt.

I've decided to concentrate on my personal debts first, as the shops min repayments are being made, and besides, most of the personal stuff is small but at bailiff calling stages!

Here is a breakdown of what I owe, it doesn't seem much compared to other peoples, but when you're a single mum relying very much on WTC it seems a mountain!

1) Personal loan with Barclays (15.9%) - approx £10k
2) National Insurance - £197.55
3) Council Tax owing - £710.43 - with bailiff company
4) Sofa company £404.96 (0% but want to get it paid asap as it was bought through a friend)
5) legal bill from a failed housemove - £386.95 - gone to court
6) catalogue - (£1200, but currently still on buy now pay later til next month)

That totals £12,899.88.

My income per month looks like this:

WTC, CTC & CB - £480
Drawings from Shop - £200-300 depending
Ebaying - £80 depending

Current expenditure per month

rent - £375
Council Tax - £68
Water - £19.41
Elec - £20
Gas - £20
Chilminder & travel for 2 evenings out a month - £103.44
Food - £60
Travel to and from work - £20
Broadband - £13.99
Catalogue payments - £60
tv license - £10.50
Loan payments - £192.83

I used to subscribe to screenselect DVD rentals for 9.99 per month, but recently cancelled that to try tarting around for the free trails for a while - as I don't go out I do watch a lot of dvds in the evening. I've also started walking to the border of the local £5 weekly rider ticket saving myself a whopping £15 a week on buses, plus getting rid of my baby weight!

Once I've got that out the way I have the shop debt of approx £28k to deal with but I'm figuring one thing at a time!

Can anyone give me any advice?

Kevicho

Doesnt seem like there is much there you can cut back on?

Have you considered alternative ways of making some extra cash?

Also whats your companies web prescence like? Do you sell over the internet?

OberonSH

Not yet, I'm having to rebuild the site after work and it won't be ready for a few months yet. I've got a lot of stuff to ebay, and I'm looking into council tax benefit & help with the rent. I've written to the bailiff company asking them to consolidate everyhing I owe (as that debt is actually about 3 smaller ones) and then let me make 1 payment to cover it per month. But I've dealt with this company before and they have a nasty habit of ignoring calls and letters and just sending someone round.

I'd get a job with someone else but not only do I run the shop on my own, But I also have a year old daughter and no family so I don't have time to fit in another job! I'm dreading a knock on the door from the bailiff company, and keep having to put the sofa company off which is straining things with my friend, as he wants the commission on the sale!

tyllwyd

You don't seem to have put in childcare for when you are at work - does your daughter come to the shop with you?

Is your husband giving you any money or is that in hand?

Have you got any other options with the shop? Long term, do you think it will bring enough income, or if not, would it be better to sell or close it sooner rather than later?

Pobby

Hi Oberon,well done for posting.Loads of folks come by this way with far more knowlage than I on personal debt.However,having run a shop for a number of years,I may be able to help a little on that score.

micheleen

When you wrote to the bailiff company did you send the letter Recorded (or even better) Special Delivery. You then can get proof they received it from the Royal Mail website, so if someone turns up you can tell them you're waiting for a reply to your letter which you can prove they received and signed for.
May make them actually reply to you.

BobProperty

Effectively I'm SE so I share your problems of not knowing your income to be able to organise sorting your debts. The one thing that I note, and there may be many reasons why it is still worthwhile continuing with the business, but, you are only making £200-300 a month out of it. The question is therefore, is it worth it compared to just going out and working somewhere?

Now, assuming it's not worth doing that, it's time to sit down and analyse what is really profitable and worth doing/selling, what would be profitable to add to your business, what isn't that profitable and needs to be cut and whether you can cut down on some costs.

OberonSH

Hi all, thanks for the kind messages.

Yes, the shop is making enough usually, it's just that it's trying to support it's own debts and mine, plus recover from another failed shop that I opened (and closed) last year. Once all my personal debt is sorted out it supports me and my daughter very well, just a bit tight till all the little things are paid. My long term forecasts show that by the end of the year there will be nothing to worry about.

My daughter comes with me to the shop and no, I don't get anything from her father as a) he's not working b) I can support my daughter without needing his money and c) I don't want to be tied to him by anything other than sharing a daughter.

The idea of selling up and working for someone else isn't viable. I'd have to be earning a fair whack to be able to afford the childcare as I have no family to support me, and I dont want to stick my daughter in a nursery all day every day.

I already sent to letter to the bailiffs, and am just waiting for the reply. Hopefully they'll be okay with what i've offered (£40 per month) but i'll just have to wait and see I guess!

dottyanne

Hi OberonSH, Im in exactly the same position as you!!! some ppl know this already and ive posted a lot about this in previous threads - why dont you PM me and we can give each other moral support, tips etc?

Im in the process of trying to get up to date with business and personal debts too - it's hard as as soon as ones paid another comes in??!!

Like i said, im S/E and run my own shop too, ive just set up an e-bay shop and am just starting to list stuff on there to increase sales....is this something you are doing, could do?

dottyanne xx

Pobby

Hi again,I`ve just posted to dottyanne about the possibility of reduced business rates being available to small retail outlets.The 20k that is owed on the shop,how much of that would you say is tied up in stock?

OberonSH

I've sorted my reduced business rates - should have had them last year too, so they're messing about backdating now, which is going to half my bill!! Yay!!

The debt on the shop is all loans - not stock. I've been paying proforma for my stock since I had a scary drop over a bad summer and had to take out loans to cover it - I pay up front and usually get 2.5% discount for doing so.

The shop loans total £24k approx and I'm just paying the normal payments (i.e. no overpayments) at the moment, until my personal debt is sorted. One thing at a time for me at the moment.