Do I throw in the towel on my business?

Slinky

I run a couple of small local magazines. One of my longest advertisers is a lady who does curtains working from a garage at home.

Don't be so sure that people want to visit premises to see samples. In my experience it's more useful to have somebody bring sample books to your home because you can check the fabric against your existing colour scheme and furnishings.

If you do decide to continue, I'd recommend trying low cost local advertising, ads in post office/newsagents windows, etc and telling every customer you have that if they recommend you to a friend you'll give them a referral fee when the new customer pays for their order.

I made peanuts in my first year in business and could quite easily have given up. Three years on I make more in a month than I did in the first year.

tonyE1

Have you done any budgets using spreadsheets etc?
I would do a income and expense summary on a monthly basis focussing mainly on fixed costs like rent, telephone, light and heat
Then do a budget for a sample of the sales you have made calculating the profit on these items, making sure you include all the costs of production such as materials, labour, you should then be able to calculate how much you need to sell to breakeven and make a resonable profit. See if you can increase profits in any way by raising prices/reducing costs.
You can then either decide whether with better advertising or promotion you can generate enough sales, or whether the gap is to wide to breach.

Lifeisbutadream

pgilc1 wrote: »

Maybe part of being a good business man / woman is knowing when to walk away? Surely if the business is £17K in debt + interest payments + losing money, maybe now is the time to walk away?

Its all very well being a hero on here about you not walking away, but maybe sometimes its better to draw a line and find a different opportunity?

I dont imagine too many of the great entrepreneurs in this country 'made it' with their first attempt.

Last year when we were working our socks off and I worked out that were were each working for the equivelent of £1.30 an hour some of the advice I had was that it was a 'hobby' and that there was no way that we could possibly run a business on such a tiny profit.

At that point we had put in around £30K and there was no way I would have given up, just like that.

We now have a healthy turnover and profit and have employees working for us.

In my opinion (and it is only my opinion) some things are worth fighting for. If the business has no customers/potential customers then fine throw in the towel and walk away. If, however you have a potential customer base and a good business idea, then you should fight for what you have worked for.

matty321

Hi, I started a business with almost nothing and within 3 years was turning over more than £250,000. Put bluntly I always remained positive, any spare time when business was quiet was spent on drumming up more business and making people aware of where we are and what we do and how to find us (look at things from potential customers point of view). Adverts, flyers, mailshots, website, i was always busy often till late in the evening, also making the shop look good and as customer friendly as possible, all on a tight budget, ie. i did just about everything, which saved money, shop fittting, flyers and advert designs, website design and much more. Basically the more you can do the more money you save the business. As for debt I wouldn't advise letting it spiral out of control, but many businesses run in debt sometimes and can do so for quite a long period so long as money is still flowing in. All I would say is remain positive, but be realistic and weigh up your options carefully, cut costs wherever possible and get people to know who you are and where you are by maybe getting your local paper/advertiser to do an article on you.

hope this is of use

Bismarck

cooltrikerchick said it best but there were some good thoughts....essentially this is not a good time for soft furnishings and if you need to do them you need to do it at minimal fixed cost and customers can do it your way or not at all.

Good luck and well done for realising all this sooner rather than later!

motorguy

matty321 wrote: »

Hi, I started a business with almost nothing and within 3 years was turning over more than £250,000. Put bluntly I always remained positive, any spare time when business was quiet was spent on drumming up more business and making people aware of where we are and what we do and how to find us (look at things from potential customers point of view). Adverts, flyers, mailshots, website, i was always busy often till late in the evening, also making the shop look good and as customer friendly as possible, all on a tight budget, ie. i did just about everything, which saved money, shop fittting, flyers and advert designs, website design and much more. Basically the more you can do the more money you save the business. As for debt I wouldn't advise letting it spiral out of control, but many businesses run in debt sometimes and can do so for quite a long period so long as money is still flowing in. All I would say is remain positive, but be realistic and weigh up your options carefully, cut costs wherever possible and get people to know who you are and where you are by maybe getting your local paper/advertiser to do an article on you.

hope this is of use

Just because your business seems to have been successful, why does that make it a yardstick for this one? 95% of businesse startups fail.

If its on a downward spiral, sometimes its best to get off before the debts get really out of control. Paying off 20K on a personal loan isnt fun, but is better than trying to pay off 50K in two years time, or losing your house.

I would just be very wary about advising the owner of business that seems to be floundering to soldier on and things will be ok..... :eek:

anitamarie

It sounds like you've lost the will to go on, which is the biggest issue. Running a small business is as much a commitment of the soul as the pocket because it takes such effort. If you decide to soldier on (and don't beat yourself up if you don't - winning sales is tough, if you're anywhere near to breakeven in your first year you've done well), this is what I would look at:

1. Cashflow - as has been recommended before in this thread, look at your projections over the next 3-6 months and where you are likely to be based on that. Then look at how much credit you're giving your customers and whether that can be reduced to improve cashflow and consider negotiating better terms with your suppliers. If you're a small business who has paid their suppliers promptly for the last year and spent £15k with them, you're in a position to negotiate better prices and better credit terms. That includes your landlord. Look at a smaller unit rather than losing it altogether if that would help, or look at sharing a space - can you sublet with another trader who doesn't want to work from home to share costs?

2. Pricing - add up your costs, how much profit you want to take (be realistic) and figure your pricing out that way. If the price is too high, find out how your competitors are doing it cheaper - have they got better deals with their suppliers?

3. Market your product - a) some universities will have outreach departments for small businesses who will build your website for free - nothing to lose there. Some hosting companies also have website builder tools which allow you to create a rudimentary presence - better than none at all. Then get some local directories to link to it so traffic starts coming in. b) local PR - can you celebrate a first year in business with a sponsored something-or-other for a local charity which gets you some PR coverage? PR is free. c) look at where your competitors are marketing and take note... d) Partner - are there firms doing complimentary stuff with units where you could display each other's business cards/flyers? It is a free and easy win for both of you.

4. Your sister is taking the p**s. She should be sharing the risk as well as the reward. That is one relationship which definitely needs renegotiating.

I would need to feel I had thoroughly evaluated the business before I locked up for the night.

COOLTRIKERCHICK

Bismarck wrote: »

cooltrikerchick said it best but there were some good thoughts....essentially this is not a good time for soft furnishings and if you need to do them you need to do it at minimal fixed cost and customers can do it your way or not at all.

Good luck and well done for realising all this sooner rather than later!

thank you bismarck....

we all know there is a down turn in the market due to credit crunch. house price slumps etc.... this line of business relies on people spending money on your products for their house.

so lets lok at this properly... not many people buying houses as the unstable house prices and lack of affordable mortgages.... so you are not going to get the person who has just bought a new house and wants to re- decorate and add their personal taste to their new home.

people who are not moving... are tightening their belts because food.. petrol..energy prices are going up, so buying household items as in house furnishings are going to be on the bottom of their spending list..

also.. i have notice with ebay and sales in general with my business that people are now buying stuff so they can do or make it themselves..


i honest dont think if you got a business that is losing money or borderlining, holding on by a thread.... to take any gambles unless you are prepared to take the risk... and that could in this case could potentially be family/home

If it is potentially a good idea, and you honestly think its going to work in the future... i would ( if i owned it ) close the business down...sort out the debt... by getting a job, and throwing every spare penny i had at it.

THEN with a clear head and a clean sheet to start from... and the knowledge and experience of what happend with this business sit down and see if it could make money...

Also i know i am going to get verbally jumped on here, but i got to say waht i feel and think..BUT have you noticed its the people that are saying stick with it, are the ones that their business are now making profits... if you had carried on and lost everything, would you still be giving the same advice....?

i have learned through experience.... and i have been there, seen it, got the t.shirt.....you have got to keep yuor eyes open.. and be honest... and no what if's

richie_greenuk

If I were in your shoes I would move the business from home and look at additional niche to operate in. I think someone mentioned earlier about personalised products - great idea. Get yourself out to groups, old people homes etc and market! How about a local shopping centre? A few sample products then they are custom made. Prepare now for Christmas too.