Please help - crisis stage

foxwales

Your suppliers are the source of your problems, it doesn't matter what action you take with your creditors you are not going to be able to survive much longer like this.

Do you have a contract in place between you and your suppliers?

If you are looking to save the business, then you need to review your relationship with your suppliers and also your business model.

Are you being paid for your products before they are delivered to your customers, or is payment being given upon receipt of the product?

Could you downsize the business to reduce overheads? E.g. quit your work office and move the business into your home, I know it's drastic but if you are paying any employees which you could do the work for, then let them go. It will mean you put in more hours, but it's worth it if you want to save the business.

If your renting a warehouse, can you sublet some space to help generate some revenue?

You need to look at all options, if you don't sort out your income, you won't sort out your debts, and your only avenue will be insolvency.

Don't contact your creditors just yet, if you want to save your business then exhaust all avenues first. If you tell your creditors your in financial difficulty or give them any warning signs, you could be forced into administration, which would mean you loose everything to pay off your debts.

Ade704

Gillianh2 wrote: »

Ade,
Not sure if this is useful or not. Could your parents enter into an "equity release" deal, whereby they release some equity in there property and that is repaid when they die or the house is sold. It cuts down on your Inhertiance but I think you need it now more than later.
Might be worth looking into.

No, unfortunately, their house is in my name. My father was forced into bankruptcy himself about fifteen years ago by a dishonest partner. They lost everything and after renting for a year or so, I bought a house in my name and we all lived in it together. I moved out about 7 years ago but the house remained in my name (they are too old to get a regular mortgage). There is little or no equity in it by the way. Thanks though.

Ade704

foxwales wrote: »

Your suppliers are the source of your problems, it doesn't matter what action you take with your creditors you are not going to be able to survive much longer like this.

Do you have a contract in place between you and your suppliers?

If you are looking to save the business, then you need to review your relationship with your suppliers and also your business model.

Are you being paid for your products before they are delivered to your customers, or is payment being given upon receipt of the product?

Could you downsize the business to reduce overheads? E.g. quit your work office and move the business into your home, I know it's drastic but if you are paying any employees which you could do the work for, then let them go. It will mean you put in more hours, but it's worth it if you want to save the business.

If your renting a warehouse, can you sublet some space to help generate some revenue?

You need to look at all options, if you don't sort out your income, you won't sort out your debts, and your only avenue will be insolvency.

Don't contact your creditors just yet, if you want to save your business then exhaust all avenues first. If you tell your creditors your in financial difficulty or give them any warning signs, you could be forced into administration, which would mean you loose everything to pay off your debts.

Going forward with the business is not the problem. We have a strong relationship with our suppliers and we have just got the backing of one of the biggest companies in the world who are endorsing and marketing the product and handing the work over to us.

The problem is that in the short term, we have very large monthly outgoing that can't be supported by the business. I think we are going to end up with my parents going into an arrangement with the credit card companies. We took some advice on it at the end of last week and we think that is the way to go.

We are also making as many cutbacks as possible to ease the pressure on cashlow as much as we can. Our customers pay us in advance for the product and we have no problems with bad debts. It is all down to the product, which thankfully looks like it is ready. The next 3 - 6 months are the key.

Thanks for your input and advice.