Panic! Sole trader in debt-advice please

HairyHandofDartmoor

If I were you I would work from home. Your business sounds as if it could be rescued. The business itself is not the problem is it? It is expenses caused by the problems you have had with the premises. If you work from home you will have much lower overheads and then less of your turnover will be swallowed up.

I work from home running my own business and I know that feeling of all your money being swallowed up by expenses, but if you are bringing money in and you have a satisfied client base then your business has the chance to succeed. Businesses always have a big problem with cashflow and this has killed many a good business, which is why you need to reduce your overheads now. Hope this helps.

mrslawrence2003

well done for posting on here. we will all try to help you as much as possible. some have excellent financial advice whereas others can help with boosting your morale and putting a smile on your face. you still have a lot going for you and the only way is up. take care and keep posting!

dottyanne

Hi - what sort of business is it if you dont mind me asking?

fabianne

Hi again
I have a hair salon dottyanne-been in the industry 21 years,trained in a top salon as a creative stylist and I love my job-even though it is tiring at times-each day is varied and I have so many lovely people as clients-who have faith in me and have stuck by me because they know I give them a precision cut,good service and non of the usual brain dead hairdresser chitchat.I am genuinely interested in them and their lives.
None of them know about all this-sat in my chair-they will not have a clue.When the 'business for sale' sign went up,many of them freaked out as they thought I was giving up (I very naughtily pulled their legs and told them I was moving to Australia to see their reactions)I explained that I wanted to rent a chair from the new owner(which I did) and also have time to go get my teaching qualifications for the future,as I have so much experience to give back to my industry. That WAS the plan.
Maybe Australia is the answer..lol.
I joked today that I should put a big dish on reception with the slogan "Save ****"...well we have Save the Whale and Feed The World after all..
I am off to do my debt plan now-does this need to be the business one and a personal one?

fabianne

Oh and on the positive side-
I counted regular clients that I am sure would have their hair cut by me in a garden shed if necessary and that totalled 86-just the ones off the top of my head.
I also have the Xmas rush coming up-which is the busiest time of year.
I contacted a supplier that I now owe money to as the bank bounced their direct debit and have made an arrangement to pay the balance off.
My main wholesaler has told me to forget my stock bill until he comes back off his holidays in 2 weeks,so I can get myself straighter-which gives me a bit more time.
Also realised that if things went pear shaped I could go and get a job in a top salon no problem as I still have some contacts and they are crying out for experienced (or in my case veteran) stylists,who know what they are talking about.

..and both my kids have won 1st prizes at school for Prize giving-am very proud of them.

fabianne

My SOA:

Business Incomings

My takings: average month £2500
Chair Rental monthly income £800
eBay retails sales average £200
Total £3500

Business Outgoings

Rent £395
Business Rates £190
Business Loan £320 APR 11.8% (currently £3,000 owing)
Assistant Wages £426.66
Water Rates x2 £58.52
Electricity £42.50
Gas £25
Phone £25
Cheap Calls(18866)£20
Insurance £65
Broadband £21.49
Egg Card £86.94 15.9% APR **Balance £4493.86**
Mint Card £95.00 15.9% APR **Balance £4254.38**
Vodaphone £43.95
Car lease £319.70 (50% business use)
Retail Stock £300
Stock £400
Sundries £60
My drawings £400
Total= £3295.52

There is also:Music license at £100 per year and the Fire Extinguisher servicing (approx £50 per year) and eBay sellers fees which can vary each month.

My bank ovedraft is over the £2500 limit.The charges are crippling me-my last quarter were £748.46 WITHOUT unpaid dd charges at £35 a pop included in this amount.
The bank have bounced a further 6 payments at £35 so far this month out of my account and will have charged me a £30 fee on top of this each time I exceeded my overdraft limit.
I have a claim against Barclays at the moment for £2,300 from what I have calculated from 2 weeks ago.I have also complained to Head Office under section 14 of the Business banking code about my manager for his unhelpful attitude when I have asked for help and my options in reducing my overdraft and provide solutions to my business cash flow problems.

Do you need to see my personal SOA too?

dottyanne

Hi fabianne, a personal SOA would be good too - just so we can see what you need to make personally to cover all your household bills and expenses - we can deal with the debts after these. You are doing the right thing by facing up to this, I know many people who bury their head in the sand but the problems NEVER goes away........

Also - what are your balances on the above aswell as your monthly payments?

Also the car lease looks quite expensive - can you not downgrade or anything?

lynzpower

Ok,

the first thing you need to bne aware of is that you can claim all these overlimit and bounced cheques direct debit fees back as they are unlawful.

Youi WILL be suing your bank ( lots of people have done it) but you need to be fully au fait with what you are doing. https://www.consumeractiongroup.com - you can claim for the past 6 years through the small claims courts.

Secondly, looking at your outgoings

Does your business only pay you 100 pw?

Plus Im not seeing anything there for the taxman, have you missed that off in error?

fabianne

Hi again
I am shattered after another mad busy 12 hour day at work and I need to close down tomorrow I think.
I will try and post my personal SOA over the weekend,but please bear with me,as I have much to do.
The car is leased and it was a mistake to get it(when things were going better) there is 11 months to go on the lease-trouble is,I need a car to do freelance jobs/kids,I there would be penalties attached and have no savings to buy a cheaper runaround.The annual car tax is included in the lease and my OH may take my car on in the New Year when he has to change his.
I only take £100 wages per week as the rest has to go in the bank to pay for everything. I haven't earned enough myself to pay tax.This is severely impacting my personal finances.
I WILL go to Court about these bank charges and it is all prepared,I have had a pathetic 'goodwill' offer that I have not accepted as a final settlement-after my complaint to Head Office about my Bus Bank Manager-his Area Manager is currently assessing it and I am waiting to hear.If I do not get every penny refunded-off to Court I will go-I have prepared the Moneyclaim form online,spreadsheets etc-the Consumer Action Group website has been an invaluable research site for me.

freebird65

Hi fabianne...

Just wanted to add some virtual support. I think you're heading in the right direction. A friend of mine ran her own salon and the overheads crippled her too.....she went freelance from home and worried about her clients deserting her but guess what......yep, almost every single one followed her and she now runs a thriving business from a spare room and wonders why she never did it earlier. It's your skill that counts, not the surroundings.

You are NOT a failure! You've built up a successful business and circumstances mean you have to make changes. A failure is someone who can't see the light, won't see it and does nothing. A success is someone who does.

And go get that bank......it really makes my blood boil how their bl**dy mindedness destroys people rather than them providing the service they are supposed to.

All the best