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business failing - what are my options?(19 Posts)
I have been self employed since 2008 but just this last year things have been going badly wrong. I'm finding that people aren't paying me on time if at all (!) and more and more are interested, but want me to work for free as they have no money themselves I currently have some work on, but it will only pay off current debt if I'm lucky, and then there will be nothing to reinvest, and nothing for me to live on.
I need dentistry urgently, my car urgently needs lots of repairs + MOT & service and we have no food in the cupboards, no money in the bank and nothing coming in til friday.
I just don't know what to do. I have my daughter to think about. Obviously I will look for part time work, but we are in the middle of nowhere in a very rural area and I've been unemployed before and KNOW how tough it is, and that was pre-recession! I have no qualifications, but have had fairly high earning jobs in the past and am good at what I currently do, so anybody reading my CV for a lower end job just isn't going to be interested
In the short term, if no work can be found, the obvious thing is benefits, BUT I know from unemployment in the past that if your partner is deemed to be able to look after you, you don't qualify. My partner shares a farm with his brother. He does NOT in any way earn enough to support our family, but he is sitting on an asset. I live here. Selling is NOT an option, it would just be like armageddon for a whole extended family because I fucked up. So I'm not going to get anything am I?
Who can I talk to?
My sympathies are with you - it's so hard running your own business, isnt it?
In the short term, have you spoken to the CAB for advice about your situation? If there's a branch nearby, you could also try CAP - they also offer specialised advice about dealing with debt.
Do you also need emergency food supplies to get you through until Friday? If so, you can get your family a food parcel from your local food bank by getting a voucher from Sure Start, health visitor, GP, etc.
It's infuriating that other people's failure to pay their debts promptly has put your family in this situation. Apparently in rural areas, the cost of living is so much higher that you have to earn a minimum of £10.16 an hour just to keep your head above water.
Meanwhile, I'd start really actively hassling your non paying clients (DH and I have found this makes a difference!). Phone calls every day, visits to their places of work, small claims courts, etc - probably the CAB can advise you on this, plus there are probably specialist advisors for small businesses.
I have friends who are self employed and find it really difficult to get 'hard' with clients who don't pay when they should. Is there anyone else who could do the 'credit control' part for you and chase the people that are not paying on time? I have tried to PM you to give some more info on this but it isn't letting me for some reason.
Thanks everyone. I feel a teensy bit more positive now than earlier as somebody paid, so no need for food parcels etc. can always ask family if we're really starving too. but long term, i need a plan! I haven't asked CAB as i didn't know if this was their thing really, but if it is then I will.
I sympathise with people who can't pay but it ends up as a domino effect...and I just racked upa nother £60 in bank charges because of it!!
Like LadyKooKoo says, DH hired an office administrator, an older lady, who was tough as nails (but totally polite) when it came to hassling people for payment. She really would phone non-payers every day and get them to log onto their bank account and make a bank transfer while she was on the phone. It was ace.
Do you have explicit late payment fees, schedule of payments, etc?
No I don't have any of that, and I think things have gone too far to start now
It is NEVER too late to turn a business around.
Do you have an accountant?
Could one of their staff do it for you? They'll take a fee but might reduce it in exchange for keeping your business going long term.
Or get a friend to do your chasing
"good evening, I'm phoning on behalf of" works wonders on payment
The cheque is in the post "excellent, could you just confirm the cheque number"
I cannot find my cheque book "no worries, I'll text you my bank account ad sort code and you can FPS it this evening
anybody you owe money to - especially HMRC, talk to them and pay in dribs and drabs rather than not at all
but hang on in there
No accountant, do everything myself! None payers aren't the only issue like I said increasingly folk are interested, but not enough to actually pay money anymore. Things have been on a downward trend for a long time and I've done everything in my power. Like I say I think I can pay off the debt, but there's no long term future. I've been looking for work today.
In that case you need to INCREASE your chargeout rate.
If you double your rate and lose 40% of your work you have more money for less time
there is this deep psychological thing that people are willing to pay for a 'premium' product if it sells itself right
in the mean time, get somebody to sort your cashflow
and possibly speak to an accountant : we are very good at paying for the service we provide courtesy of lower tax bills
Can you diversify your services/products? Move into a new market? Develop a new (related) product for your existing market?
The key is to make people pay for (and actually pay up!) your services/product in the end though! Don't work for free - would you ask your hairdresser to cut your hair for free? Would you expect free coffee from Starbucks?!
I don't even earn enough to pay tax
I could charge more, and get even less customers, but if I just maintain current levels of income, I'm in the shit forever. My savings are gone (not that I had much!), no pension, no nothing!
I don't want to be one of those miserable no no no people, I'm usually very gung ho, but honestly, I've tried feckin' everything! I just seem to get further and further out of pocket, and only ever hear 'so nice, I'll have to save up' from people. I've ended up bartering a lot of stuff just to get by!
I don't want to be one of those miserable no no no people
Then you are not cut out for business I'm afraid.
Food on the table / bills paid overrides pretty much everything else.
Have you thought about charging more but offering a prompt payment discount? (combined with chasing your current debtors). Sorry if you've already considered this. It is true that people are influenced by price - they think they are getting a better product if you charge more BTW. So you might attract different customers by advertising your services at a higher rate (who then hopefully pay quicker if you offer a discount).
What are you doing to promote yourself and your services? Social media is free and can be great if used effectively.
It would leaflets dropped direct to households work?
What sector are you in?
Can you do other things that you can be paid for to top up earnings? Cleaning, garden maintenance? Shopping service?
Lots to think about. If you can give a few details, I might be able to help a bit more.
Over the last few days I've done a lot of 'stuff', selling off stock to pay some bills, chasing people up, and have a strong lead on some freelance work (thank christ) which should tide me over in the short term, without taking me away from DD too much. Long term, I'm taking a gamble and tweaking my business, taking it in a new direction with a re-launch. Here's hoping!
Good for you!
I think that Jellycat's idea about increasing rates and offering a discount for prompt payment is a good one.
Do you want to try changing your name and telling us more about the business on a different thread, so that we can offer more advice?
I think you should also look at the legals around the family farm, to make sure that it isn't in any danger of being sold if either family gets into financial difficulties.
yes I like the discount for prompt payment idea, will definately implement that in future - never thought of it before.
the family farm is a complete minefield, more of a curse than a blessing although I get a lot of 'aren't you lucky'...it's like a beautiful prison/labour camp sometimes! I would happily extricate myself and set off into the sunset with DH but he WON'T leave, and I can see why, and I knew that when we got married so it's my own doing!
I don't feel quite comfortably talking about exactly what I do, I wouldn't want to be outed, for the reason that I wouldn't want customers to know the extent of my problems iyswim?
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