New business cash flow issues.

deepindebtor

We are a small business that is having some temporary cash flow issues, my problem is that we took out several phones with T-Mobile and we are currently unable to meet the payments. In fact we are almost 2 months behind in the bills and they have cut us off.

My worry is that we are in a situation where they are going to be adding monthly charges, we are going to be trying to catch up but never quite getting there and spending all this money and getting nothing back, which does seem a tad unfair.

I have reached out to T-Mobile to see what they can do for us.

My other worry is that we end up going bankrupt over this.

Cash flow is returning, and I expect to be building business, this bump in the road is a worry to the whole business though. Certainly learned a lesson through it!

Anyone that can offer advice I would appreciate it.

pitkin2020

can you not reduce the contract package to a lower package?? Sell the phones but keep the sims, if they are good models you could then use some of the funds to buy £20 unlocked phones from tesco's.

deepindebtor

Thank you for the suggestion but we are locked into the packages we are on, the phones wouldn't bring in a lot, sadly.

pitkin2020

Not a great deal you can do then other than raise cash somewhere else. Seems a bit odd a business with such low cash flow taking out several phones on a locked in contract.

motorguy

pitkin2020 wrote: »

Not a great deal you can do then other than raise cash somewhere else. Seems a bit odd a business with such low cash flow taking out several phones on a locked in contract.

+1

I'm nearly a year in and still have a pay-as-you-go phone.

paddyrg

I think 'unfair' might be unfair - they have kept their side of the deal, after all.

How about asking them if you can move to a lower tariff or buy out the contracts? Will selling all the handsets raise enough to buy out at least some of the lines? Then if those people really must have company phones, you can get unlocked handsets for a tenner (like the Binatone mimo) - not terribly fancy (no games, email, etc.) but you can get on PAYG or SIM only monthly rolling deals.

Oh, I see you are trying that - oh well, frankly unlucky :-( You should give your business advisor a whole heap of grief for not warning you about the value of cash in the bank/cashflow!

deepindebtor

Well thanks for your help Paul, glad you stuck your oar in!

We didn't have low cash flow when we took the contracts out but if you haven't noticed things are not all hunky dory right now everywhere.

I was rather hoping for help rather than just plain criticism, after all it was help I needed.

steve1980

How many contract phones have you got? Why do you have them all? Are the people that have the phones abusing them?

Seraphim

Have you spoken to your bank? They may be able to provide you with a loan or a temporary overdraft - check the charges as although you will have to pay for the facility, the charges are likely to be lower than the charges you are accruing on your phone bill.

Also, what sort of industry are you in? Do you have a lot of outstanding invoices? Can you ask your clients to pay up front for a % discount, or give some sort of discount to people who pay within 15 days of invoice? At least this might ease your cashflow in the short-term?

motorguy

deepindebtor wrote: »

Well thanks for your help Paul, glad you stuck your oar in!

We didn't have low cash flow when we took the contracts out but if you haven't noticed things are not all hunky dory right now everywhere.

I was rather hoping for help rather than just plain criticism, after all it was help I needed.

Its an open forum on which people can comment. I chose to comment.

Dont forget that these threads are read by a lot of people. Someone commenting that perhaps tying a new business in to a significant monthly outgoing on contract phones isnt a great idea might actually help someone else.

And yes, i'm well aware that things arent hunky dory out there - i face it every day. I just make sure i minimise my outgoings.

paulwf

There are times when you need quick turnover of cash even if you aren't making a profit on that business deal so that you can get repayments up to date. Is there a special offer you can do or any stock you can ebay? Any assets you can sell?