How to prevent giving up on business??

Luna69

Hi
Following on from a thread I started about a non payer, my partner has realised how bad it is right now. He's basically up to his overdraft limit after increasing it only a few months ago and it's ridiculously high. We have bills to come out, he can't pay rent on our unit, he has stock to buy for jobs he has on this week and basically he's hit rock bottom and I'm worried. He's all for giving it up!

We've been going now for 4 years and had our fair share of rough times and troubles... hospitalisation of my partner due to pneumonia on the day he should have first moved into our business premises, took him a few months to recover so lost a lot of work although did do as much as he possibly could to keep it going, up to now 3 problems with big non payers, an arson attack last year where we lost our premises (and very nearly his life), had to wait 6 months or more for rebuild. Losing a lot of equipment including some brand new delivered the same afternoon! Luckily a lot of it we managed to rescue and still worked although looked years old! We had to work from home during that time which was not easy, especially with 3 children, one of which arrived a week after the fire!! Eventually moved back into a new unit, we'd accrued yet more debt replacing lost stock and equipment via credit card as we'd discovered we weren't insured enough for the additional stock/equipment we'd bought since first taking it out! :mad:
Basically now we are up to the eyes and over in debt, not due to over spending for the sake of it, but due to the business problems and non/slow payers and having to rely on credit cards/loans/overdrafts, which has now become a nightmare and one I'm not sure we'll get out of.
If people paid up when money was due we'd manage ok and even be able to pay off some big debts, but it's just not happening and since it's only us, mainly him as I look after the kids too, we have no one to chase debts and keep an eye on finances while he works, so he has to do it all, working all hours, with little sleep and basically it's taking it's toll.

Just wondering if anyone has any advice or has been in this situation and managed to get through it and come out the other side glowing. Or is it just a case of give it up?
Would be a huge shame if we had to do that.

My partner worked for a company for 10 years before setting up on his own. He now gets more work from them independently, only difference is, he gets paid what he should for it. Reason being he does it better than the staff they have in now and they're willing to pay to keep their customers.

What can we do?

Thanks and sorry for waffle
Yvonne

Mike_by_the_Sea

Hi Yvonne

You have had some "great" times in the 4 years. Picking the bones from your post it seems that your key challenge at the moment is getting paid in a timely way for the work you do and having nobody to focus on it.

You will not be alone - there are far too many businesses that fail, not because of a successful concept, but because of cashflow.

Have you thought of taking on a part-time credit controller / book-keeper to focus on your cashflow position. This doesn't have to be a big cost, but could give you some headroom to get on with the business. Perhaps an advert in the local paper?

They could look at your overall position and give you an analysis of where you stand before you find it is too much and just have to let everything you've worked for go.

This is the type of thing that I have done before with local businesses where things have got too difficult and it can end up giving you that glow at the end of the day.

There are also factoring companies, but I've been there and wouldn't recommend them unless you are in really desperate times. There are some good initial benefits, but at the end of the day you can easily end up a lot worse off than before.

Good luck

Mike

Luna69

Hi
Thanks for your reply, pleased someone did or I'd have thought we were definitely on our own! :rolleyes:

Anyway, I'll mention the credit control thing and see what he thinks. If he takes any decent time off over Christmas, we are going to work on a lot of things to change the way we currently work. Including updating his own website more often and doing more online so payments have to be made for most things first.
For larger or more expensive things, we'll need maybe half up front ie: websites etc.
We just seem to hit these hurdles fairly frequently just when things seem ot be looking up, I guess most new businesses do go through the same thing, but it's good to hear from people who have come out the other side regardless of the struggles.

It is really hard though with mounting debts, no cash, 3 kids etc. Also most relatives/family keep saying will it not be better to go back to a normal full time job, so we have a regular wage coming in, which in that respect yes it would, but his working hours were pretty much the same working for someone else (all hours), but the money wasn't and it was thankless. Yes sometimes this can be the same, but at least now some people appreciate the work he/we do and will pay for it. Just don't know.

So thanks again, hopefully 2008 might improve! :rotfl:

Yvonne

martindow

Business Link could be very helpful to you.
https://www.businesslink.gov.uk
They are government funded and offer helpful free advice. They would be worth talking to as sadly slow payment is not uncommon. I hope that you manage to work things out.

COOLTRIKERCHICK

please dont let your heart rule your head over this one.... i know it sounds silly but you can get emotionally attached to your business... so you dont really see the true picture...hope that bit makes sense..

in reality you have got to ask yourself a few questions, and only you and your
hubby by can answere them.....and be truthfull , honest and REALISTIC

if these slow payers paid would the business be viable...? or would you be constantly in your overdraft ?

is it worth closing winding up the business and finding a job, which you have a regular wage/salary paid into your bank account.. so you can budget ..and no worries about late/slow payers..

if you have had to use credit cards etc... dont forget to factor in the interest they are charging on the business debt....

could you move to a smaller busness premises to save money ?

to be honest i dont know whether spending more money on part time wages for someone to keep track of payments etc... as by the sounds of it these slow/non payers might be like that with everyone regardless if they have a book keeper keeping up with finances....

if you have had to increase your overdraft a few month ago and now its at its max.... this could really be the time to get a reality check, before it gets any worse..sorry, dont mean to be so gloomy but sometimes it is hard to see the signs on when to say enough is enough

but on saying that i might be totally getting the wrong vision of your business.

go and have a nice cuppa with a choclate buscuit..as i allways find that helps in getting my self focussed...lol....

good luck...

vivatifosi

Hi Luna69,

Cool and Martin make excellent points. I would definitely get professional help and get a full business review. Take control of your situation before it takes control of you.

Don't go to your bank, you may inadvertently tip them off to situations they aren't aware of, but Business Link or similar should be able to help. I'm in Hertfordshire, and I have my own Business Mentor who has helped me with my business. Its confidential, free, but best of all trustworthy. It isn't through Business Link though, but a local small business support org. If Business Link can't help you there may be a similar org near you.

Incidentally, I'm thinking very seriously about returning to employment after running my own business for 4 years, though I'd keep it running in the background. Like your partner I fell ill and its very hard to rebuild momentum after something like that. I quite like the idea of having the safety net of a job alongside the freedom to do my own thing.

Good luck whatever you decide to do.

talkinpeace

OP
If your debtors are as substantial as you imply, go straight for winding up orders at 90 days on all those over £700 (having sent weekly letters first of course)
as soon as one goes ahead, all the others start to cough up the cash.
Alternatively, who is the scariest looking person you know, hire them to hand deliver debt collection letters (in an ever so friendly way)

If by the third week of January you have recovered enough to put you back on a secure footing, go for it.
Otherwise, take the advice of those on this thread and consider walking away.

martindow

vivatifosi wrote: »

Hi Luna69,


Don't go to your bank, you may inadvertently tip them off to situations they aren't aware of, but Business Link or similar should be able to help. I'm in Hertfordshire, and I have my own Business Mentor who has helped me with my business. Its confidential, free, but best of all trustworthy. It isn't through Business Link though, but a local small business support org. If Business Link can't help you there may be a similar org near you.

Business Link seem to sub contract freelance people to do business reviews. I'm in Berkshire.

kaznelson

Hi, Ive emailed you the letter we spoke about :-)

Luna69

COOLTRIKERCHICK wrote: »

please dont let your heart rule your head over this one.... i know it sounds silly but you can get emotionally attached to your business... so you dont really see the true picture...hope that bit makes sense..

in reality you have got to ask yourself a few questions, and only you and your
hubby by can answere them.....and be truthfull , honest and REALISTIC

if these slow payers paid would the business be viable...? or would you be constantly in your overdraft ?

is it worth closing winding up the business and finding a job, which you have a regular wage/salary paid into your bank account.. so you can budget ..and no worries about late/slow payers..

if you have had to use credit cards etc... dont forget to factor in the interest they are charging on the business debt....

could you move to a smaller busness premises to save money ?

to be honest i dont know whether spending more money on part time wages for someone to keep track of payments etc... as by the sounds of it these slow/non payers might be like that with everyone regardless if they have a book keeper keeping up with finances....

if you have had to increase your overdraft a few month ago and now its at its max.... this could really be the time to get a reality check, before it gets any worse..sorry, dont mean to be so gloomy but sometimes it is hard to see the signs on when to say enough is enough

but on saying that i might be totally getting the wrong vision of your business.

go and have a nice cuppa with a choclate buscuit..as i allways find that helps in getting my self focussed...lol....

good luck...

Hi
Don't worry about being gloomy, we do actually go through these things quite a lot. We are in a fair bit of debt now due to events that have happened since we started the business, however if we did get all our payments on time and a few other problems were ironed out, we could I believe actually get ourselves out of it. Not overnight, but shouldn't take too long, bit longer than we'd like, but not a lot we can do about that one.
The business itself does actually do well and we deal locally mostly at the moment. A few customers come from a bit further afield, but most are local businesses themselves.

One of the problems I think we have is that my partner has taken on a bit too much over time, adding more sides to our business than he can manage. I do help out with part of it and actually one part that has turned into our most profitable, or it would if he actually charged enough for some things.. that's another story though.

He started off as a web and graphic designer. He was a graphic designer for 15 years before we set this up, the web was a newer venture that he had started before we set up too, but it was this that prompted him to do this.
He then went into video to dvd stuff and other similar lines. From that we brought in photo gifts and printing and more recently digital printing and copying, which is another big boost to the business. So when we can actually scrape away at all that is bad, there is a lot of good, which we need to bring to the surface.

He's basically not really ready to give up on it just yet, despite the title of the thread, we do hit times when we do wonder if it's worth it though and just not sure how many times we can go through this before we crack.

This is why though we're going to try and sort things out over the CHristmas time off (what he'll have).. basically try and start again how we really should have in the beginning, but I guess you don't really know what to expect to be honest.

Luna69

martindow wrote: »

Business Link could be very helpful to you.
https://www.businesslink.gov.uk
They are government funded and offer helpful free advice. They would be worth talking to as sadly slow payment is not uncommon. I hope that you manage to work things out.

Sure he has spoken to people there, but not sure how long ago now. Don't know if he thought they were much help at the time. He could maybe try again though. Trouble is he never finds the time for this kind of thing, so we'll see.
I know we need to do something though.