Start up business HELP!!! Capital, overdraft, banks, defaults

Annisele

rafiduck wrote: »

We have a business plan and both worst-case and best case cash forecasts. The monthly outgoings are £2700 which are mostly made up of advertising costs, these advertising costs need to be covered for at least 6 months until payments start coming in worst case.

But that's not the worst case.

The worst case scenario IMO is that you don't actually sell anything for months - and continue to incur costs of £2700 per month without any income.

If that happened, how long could you keep going?

motorguy

Annisele wrote: »

But that's not the worst case.

The worst case scenario IMO is that you don't actually sell anything for months - and continue to incur costs of £2700 per month without any income.

If that happened, how long could you keep going?

+1

The 'oh we've got a spreadsheet that shows the worst case scenario, so we're OK' type statement worries me.

Worse case scenario is they dont sell anything for a year. So thats £30,000 dead based on £2,700 a month. Also, lets assume they take a meagre £1,000 a month each to live, thats another £24,000 in the first year they need.

So thats £54,000 the business will burn in 1 year.

Also, i dont see the benefit of a limited company here - its primary function is to protect the business owners, however anything going into the business is either personal loans or will be loans with personal guarantees - all repayable if the business fails.

I just cant see how this can fly.