An Entrepreneur in Debt - My DFD

CharlieWaffles

Hi Everyone, My name is Lee I am an Entrepreneur and I am in Debt....

I have decided to start a Debt Diary for two main reasons:

1. I need to admit to myself this is a problem (and take action)
2. I need accountability and support (hopefully for the MSE community)

For the past 15 years I have worked for myself (self employed sole trader) and have had various business interests. My main business, which has been the main source of income for me over those 15 years has recently failed due to the economy.

Since January 2011 I have lost around 11 long term clients all of whom have gone bust or closed due to bad times. That was a major loss for me as not only has it given me £2000 per month less income but they closed or went bust owing me money. For the past 10 months I have in reality been living off my savings and now they have gone. Things are getting tight and to top it all off my Girlfriend has just discovered she is pregnant. (excited about that but worried about our finances)

I had a bad break up with my ex-gf 5 years ago and the breakup cost me money. Along with her leaving me in debt. I met my current GF around 6 months later and couldn't be happier.

My background is IT and I am currently making a living from a new business that I have just set up. This new business is going to take 2 years before the income is high enough for me to use the income to pay off my debts, but the debts I have are at a critical state now.

I own a property but I dont live in it - I rent it out.
I then Rent a property that I live in with my GF

My current Monthly Costs for Rent, Council Tax, Gas/Ele, TV, Food, Car Ins - £980
I then have to pay CSA for my daughter from my previous relationship - £225
Costs inc Mortgage & Insurance for the property I rent out - £231*
Overheads for current new business - Equipment Finance, Phones, Services to run Business - £700

*Mortgage - Just switched to Interest only for 6 months with Mortgage co


My Debt:
Bank Overdraft from old business - £4000
Credit Card 1 - £1800
Credit Card 2 - £480
Student Loan (from 1995) - £800
Argos Card - £300
Private Loan - £6000
Yellow Pages Advertising (old business) - £8500
Mam Loan - £3000
TOTAL DEBT: £24,800 (Yikes)

And my income is £1900 per month (which includes £450 from rent of property)

So as you can see even forgetting my current debt, I dont have enough coming in to pay the bills.

My biggest strength is being an Entrepreneur as I find that I can identify ways to make money quite easily but
I also think it is a weakness as I keep thinking - "something will come up and it will work itself out" (ala Two and a Half Men - Charlie Waffles)

Having read the DFD on this forum over the past few days (I found the forum when searching for debt help) I am also going to start selling some things on Ebay/Amazon - I think these are great ideas. Also, as I am new here anyone that can point me in the direction of any good ways to make money that have been successful for others doing DFD I would be greatful. Also, whats an LBM ?? (seen it on other diaries)

With my background I am also going to use the internet to make some money (I will keep a full diary of it here) and also Network Marketing - Specifically Utility Warehouse - My Gas and Electric Bill just came and is twice the monthly cost of the last bill so I am switching to UW and becoming a distributor. (BTW I am not going to try and sell/recruit anyone on here to UW)
(My sponsor is going to pay for my sign up fee) - My focus is now away from saving and is fully on paying my debt off asap. In that respect I am prepared to do whatever I need to do to make money.

My 2 biggest urgencies :-

Council Tax - Have a court Letter and I need to pay £330 by 28th Nov to stop this.
Yellow Pages (RSMTenon) - £500 on 1st December (or its going to the solicitors they said)

Please do let me know if there is anymore information you would like to know about my circumstances or debt I am happy to share in exchange for your expertise.

Kindest Regards
Lee (Charlie Waffles)

Memory_Girl

Hiya hon

Take it you don't want this sugar-coated?

Don't worry, we are tough, but fair and I am a great believer that if there is a bit enough "Why" you can find the "How"

Pop up to the top of the DFW thread and find the stickie that takes you to your SOA (Statement of Affairs)- it will give you a snapshot of exactly where you are right here and now. More importantly this is a format we are all familiar with and can quickly help you identify the quickest route to trim costs in the first instance.

This might take a wee while to pull all the info, current balances and APR but knowing exactly how deep the hole is that you are in is the first step to pulling a plan together to get you out of it.

And don't despair - In less than two years I have just cleared 10K - and my income has been less than £900 per month the whole time so it can be done ..................... you just have to get a creative head on ................... and if you are truly an Entrepreneur then creativity won't scare you a jot.

MG

CharlieWaffles

Hi MG,

THANKS for your support and thanks for letting me know about the SOA - I will get onto it right away, like you said might take me a few days but Il do it.

Lee

Memory_Girl

Nae probs hon

Welcome on board BTW - sometimes it hurts, sometimes it sucks - but it works.:D

Now off to feed two starving lads HM pizza for tea before an evening of telly and knitting - sheesh!!! You'd think I was eighty :rotfl::rotfl:

Actually I am off out wearing an evening dress, fake fur and peerie heels for an evening of food and decadence with Gabriel Byrne (don't ask, long story) .................... but don't tell them on the Matrix thread as I'm supposed to be paying off the mortgage :rotfl:

Ah well, dream over, pizza it is:D

MG

ETA - you do realise you debt is only 1000 payments of £24.50? How might you earn the first one??

CharlieWaffles

Hmm yea 1000 payments of £24.50 :-) Good way to look at it.
Well my first plan is to make that first £1 and then build up.

Getting my affairs in order now and looking at what I might have in the pipeline - Still waiting for my PPI Claim (£600 ish) to come in.
Also, I might sell my car (worth around £600) and use my Work Vehicle for non work running around.

Enjoy your Pizza....

Lee

LondonGirl252

Hi Lee,

Welcome to the board, you will find the support and advice on here outstanding, Ive had a diary for 2 months now and my ways of spending and dealing with money have taken a complete change for the better. Well done for admitting your problem, you're in the right place!

Posting your SOA will bring tonnes of advice and you'll get lots of ideas to cut back on spending and upping your income!

Best of luck, I will subscribe and follow your progress

LG

Northern_Lassy

:wave:Hello
Congratulations on the baby x Good luck with your debt-busting...I have a feeling you will get the better of the situation as you sound so determined :T

teapot2

Hi Charlie,

best of luck with your debt clearing, loads of good ideas and support on here. An LBM is a 'lightbulb moment' - lots of folk have them and then realise they need to do something about their debt 'cos its not going away on its own............

debtfreewannabe321

hi lee!

thought i'd pop into your diary as you came to mine

Congrats on your baby, how exciting :j

When i first joined, i changed gas/elec suppliers and downgraded sky & changed landline to lower tarrif etc. Make sure (if you don't belong already) you join quidco, and top cashback. I've earned over £200 this year since joining on buying things that i had to buy anyway :T

I've recently got tenants into my let house too, and know what a pain it is to have the two houses running when you're flat broke !

If you have books to sell i've heard green metropolis is good, ebay & amazon for other bits & bobs (i also sell a lot on our local facebook selling page), music magpie give you money for old dvd's and c.d's although i found their prices to be very low.

Other people will probably come along with advice too, and i second doing a full SOA, even if you don't post it!

Also keeping a daily spend diary cut my spending by loads! And joining some of the challenges on the forum help me to focus good luck, i shall subscribe and see how you are doing :T

CharlieWaffles

London Girl - Thank You, am following your diary too :-)

Northern Lassy - Thank you too

Teapot2 - Thanks - and LBM ;-) cheers

Debtfreewannabe321 - Thanks so much, thanks for the suggestions too - I will sign up to them all now )

I feel much better already, thank you all so much for the early support.

CharlieWaffles

UPDATE 4.10pm Sunday 13th November 2011

Have had a busy debt sorting day today; firstly went to do our weekly food shopping as was very careful not to pickup things I dont need. I had a good deal on Pot Noodles and Soup.
I did have one purchase that wasn't essential but in a way I think it may have been and that was a magazine called "The Independent UK guide to Ebay 2012 and how to make serious money with Ebay"
it was £7.99. I thought if I am going to start selling stuff on Ebay I want to do it properly. I sacrificed some food in today's shop to make up for the spend. In total we spent £62 and I budget £70 per week for food so not too bad. (we shop at Tesco) I may look to shop elsewhere when my Utility Warehouse Credit Card thingy comes through so I can get the cashback.

Once I got back I started registering for Quidco, Top Cashback, Ebay, Amazon and Play.com <-- found that in the Ebay magazine, they have a sell things online area too.
I have also been looking at ways to make money online, and I have some ideas which I will explore this week.

Im also looking for things I can sell and have realised I have quite a few things I labelled as Junk from my old business which could generate a few quid.

Have also started getting my SOA info together, wow thats a challenge but about half done.
What I have realised with doing the SOA and a bit of work in Excel is that my initial plan was to use the money I get back on my PPI reclaim to pay off my CC1 which is costing me £14 per month minimum
payment. I thought of that as my first target so I could show less debtors HOWEVER, if I pay that amount of money off my CC2 bill, my monthly minimum payment for that card would drop to a level that
saves me £29 per month. So lowering the amount owed on CC2 instead of clearing CC1 would put me in a better position.