Why Am I Still Trying to Make this work?(55 Posts)
Been running a business for 2 years, that does personalised gifts.
We now have £12 in the bank and I've just done a quick expenses tot-up of how much we've subsidised the business from our personal accounts over the last quarter [and this is only the ones I have recorded so far!] - £500+
I have just booked two xmas fair slots for which I will need to spend a further £150 for stock to show, which will have to come from personal monies.
We do half a dozen orders a month right now that nets us £120, after paying royalties etc. This effectively pays for the overdraft fees and payments to credit card machine use. That's all.
The advert so far has shown no ROI whatsoever. I have never sold at a fayre and have no reason to believe I will this time.
For all sorts of legal reasons, we have to keep going to try to make it work. We have 3 directors, but I am the only one who works F-T on this [the others are my DH who has a FT job in IT that he has just spent the last 7 days working virtually 24hrs a day on, and the other is a 'Non-exec' ie she does nothing]. We also have an ex-director, who is the majority shareholder, with whom we have no contact.
Please tell me why I'm doing this and why I should continue? More to say but got to take kids to school! Part 2 coming soon!
What type of personalised gifts do you sell? I'm assuming the 6 orders a month is due to poor sales and not due to only being able to handle/manufacture 6 orders a month?
Do you sell online?
Do you have a physical shop, or are the credit card machine fees just for the fayres?
Do you get much interest at fayres? Do you get anything else out of the events - i.e. are you handing out leaflets, business cards etc?
Do you do social media?
"Why Am I Still Trying to Make this work?" - is it because you think the business still has potential to succeed, or is it out of some feeling of obligation to the other parties involved?
I have about a hundred more questions, but will sit on my hands and wait for Part 2
You sound as if you are carrying people. Do they have a share of your profits? Why?
I'm a writer and I do copywriting. Marketing your product(s) and making it sound as delicious/wonderful/unmissable as possible is more important than people think.
Why not send me a copy of your advert and I can give you some advice. It goes without saying - that it would be free advice.
You can turn this around! You shouldn't have to work this hard.
OK - Part 2:
Just come home having done deliveries on behalf of my DH as he's away all week in Swansea [we're in South of England], so lost half a day of my own work! To answer queries so far - MonkeyNuts first!!:
Q: What type of personalised gifts do you sell?
A: NameArt on canvas/prints/china; plus a photo restoration service
Q: I'm assuming the 6 orders a month is due to poor sales and not due to only being able to handle/manufacture 6 orders a month?
A: Correct, but if we do get more orders, it's only me who does the work, as everyone else is busy either 'earning a regular wage' or 'dealing with their other, profitable businesses'. This means I'm doing the web design, marketing, ordering stock, finding places to try to sell our stuff, invoicing, admin, producing the designs, co-ordinating, etc etc etc
Q: Do you sell online?
A: yes, we have a hefty ecommerce solution, chosen by DH, which costs ££ and brings us no business - a good day we have 10 visits, none of which results in a sale
Q: Do you have a physical shop, or are the credit card machine fees just for the fayres?
A: we do have a shop that stocks our goods, along with 70-odd others. The deal DH struck was that rather than us pay a shelf fee [which is what all the others do], we give then 50% of profits [sic] on every sale they make for us. They take one order a week on average.
The c/c machine is just for fayres, at which we have never sold anything yet, or for the rare occasions when a customer rings direct for an order.
Q: Do you get much interest at fayres?
A: nothing for the last 2 years. I've tried Xmas fayres, toddler groups and coffee groups
Q: Do you get anything else out of the events - i.e. are you handing out leaflets, business cards etc?
A: yes, lots but nothing ever comes back
A: anything I post gets little response and no orders.
Do you do social media?
Q: "Why Am I Still Trying to Make this work?" - is it because you think the business still has potential to succeed, or is it out of some feeling of obligation to the other parties involved?
A: I'd like to think that one aspect of it still has viability but right now, my feelings aren't enough to generate the ££ quickly enough. I will not be permitted to cut out the stuff I don't want to work with, as the other directors have veto'd anything of the sort. I get no support from DH, as he was out of work for 18 months just at the time we had started the business and he claims it kept him sane [well it ain't keeping me sane any more]
Responses to Punkatheart:
Q: You sound as if you are carrying people. Do they have a share of your profits? Why?
A: ex-director with whom we fell out is the majority shareholder [36%]. There are 4 shareholders, DH is one [16.5%], me 16.5%], executive director-cum-dragon [32%], and the ex-director. I do 100% of the work.
Q: I'm a writer and I do copywriting. Marketing your product(s) and making it sound as delicious/wonderful/unmissable as possible is more important than people think.
A: Why not send me a copy of your advert and I can give you some advice. It goes without saying - that it would be free advice. THANK YOU! The advert itself is fine, it obviously touched a nerve and we have had more response to it than the next 10 articles published on the same website put together in terms of facebook likes and responses! BUT - lots of fb likes does not = ££ in the bank! The ad cost us [personally, yet again, as there's no money in the business account] £300 and so far has generated a big fat zero [after 2.5 weeks].
OK, my first thought is that there is a lot of potential for increasing sales, although I'm a bit concerned that you've said you are single handedly doing ... well, pretty much EVERYTHING. What % increase in sales could you actually handle? What is the executive director-cum-dragon actually contributing, if not finance and not day-to-day stuff?
If you'd like to PM me your website address and social media URLs, I'd be more than happy to take a look - free of charge. I'm moving into website performance analysis to complement my existing web dev/analytics services and would be glad to take you on as a case study, if that suits.
It sounds like the product is the problem here. Have you done a full analysis of your offering in the context of the market, competition, price etc?
monkeynuts: that'd be great! I'll send you a link via pm if possible? Bear in mind that it's me doing the web design. We have spent £2K in the past [yes, from personal monies!] using professionals and it got us nowhere.
Mooncupgoddess: depends what you mean by analysis - the main thing we've done is spent 14 months working our sorry a@@s off in a retail centre on what is effectively a market stall type of unit. We ended up with huge turnover so we know there's a demand, but left owing money due to high rents [the old chestnut], so now have no 'shop window' and can't afford one! We can't go back to the retail centre as it nearly killed us physically. I am however, being more realistic than the other directors [I hope] in thinking that what we offer is too high priced for what it is, but it's not possible to reduce product costs or we will be working for less than nothing [which is what we're doing anyway!]. The website is a huge overhead but no-one will hear of dropping it, which is what I feel should happen, at least for the time being. I am constantly out-voted as it's always 2 v 1!
monnkeynuts: in answer to quetsions:
Q: OK, my first thought is that there is a lot of potential for increasing sales, although I'm a bit concerned that you've said you are single handedly doing ... well, pretty much EVERYTHING. What % increase in sales could you actually handle?
A: I could handle plenty more orders as long as I'm not doing 'everything else'!!
Q: What is the executive director-cum-dragon actually contributing, if not finance and not day-to-day stuff?
A: nothing apart from the odd suggestion of who we could approach, but without any ££ in the bank, I don't know how she expects me to do this!!
"I am however, being more realistic than the other directors [I hope] in thinking that what we offer is too high priced for what it is, but it's not possible to reduce product costs or we will be working for less than nothing [which is what we're doing anyway!]."
OK - so there is a market for your product, but not at the current price? But you can't afford to reduce the price? Hard to see where to go from here, really. It sounds like you are putting in a lot of time and effort for negative returns.
Are you in danger of trading whilst insolvent and do you understand the personal implications if this?
Re insolvency - we are technically, I suppose, as we are constantly having to pay bills from personal accounts, rather than from the business account, but DH would say "that's a cash-flow problem"?
I do understand the issues and have raised it, but I always get talked round to the position of "carry on regardless".
I have now taken some advice from a lovely Mumsnetter who has had a look at things and come up with a little of things to do, so will pass this on to see if DH and the other Director pay any attention.
Still think one issue is the constant fighting with DH as we are on opposing sides [it's meant to be my business but he kind of took over and turned it into a big ecommerce enterprise which it was never really meant to be!].
Your sales are very low so either your product isn't being well received or it is perceived to be too expensive.
I think it is very hard to make money from craft based businesses as the ROI in terms of time/marketing effort very often isn't justified. I am sure there are lots of sellers on Not On The High Street in a similar position to you.
Can you do some market research to get an honest appraisal of the situation? It might be hard to hear but might make you a bit more realistic. Also, what about adding another product?
Best of luck.
Honestly? The only practical advice I have is to call a board meeting and shut it down. I'm sorry if that sounds blunt. If you're not trading while insolvent you are sailing perilously close to it. You're not making money. You have an exceptional complex business structure. You are the only one doing any work, you can't find a way forward for the business and you're bleeding money. Why are you keeping it going?
Oh, get rid of the credit card machine. Ask for cash at fairs and stuff, it's not unusual.
I'm at a loss to understand why you have so many share holders, when you are effectively a sole trader - in the sense that YOU are the one holding up the business & it doesn't sound as if there is really a way out as the more you sell, the more work YOU have to do, which puts a big fat ceiling on potential to expand & be in profit.
On the other hand, if you take Wilsons advice, call time on it & perhaps set yourself up on your own in future, market yourself as a small crafts person etc etc & take it from there - I think you would have far more chance of success -
doesn't sound like the others are any use even when they are pulling their weight - 50% cut for sale or return isn't a deal, it's a rip off - what on earth was your DH thinking
Hello, thought I'd add my tuppence worth.
This is a business that can barely sustain one person, why are there so many directors??
Also I don't think paying for a card machine for fairs is necessary... Most fairs have access to bank machines etc. I wouldn't bother unless you were taking XXX number of orders per fayre.
Exactly mrsc. I work as a freelance copywriter (so similar to the OP that I only have so many hours in the day to actually turn out the work) and I make a comfortable living. But if I had to split it four ways I would be a) broke and b) totally demotivated.
Sorry - enormous rant coming up - bear with me!
OMG whenever I answer all these questions it just gets more + more clear what needs to happen - I just am not being allowed to do it!
I have completely lost faith in myself and my ability to actually contribute anything at all to the world. What is the point?
It is just so complex as in the middle of all this DH was out of work for 18 months and we have lost the last 15 years financially, we have just sold our flat which we were renting out as our retirement [no we don't have pensions] in order to pay off some off the money we have been forced to borrow against our house.
We are now still badly in debt [to 5-figure sum] and yet right now, we can't pay our printer as our retail outlet refuses to get around to paying our invoice [they take payment in full in the shop and when they feel like it they pay us against our invoice for our cut] and we only have £13 in the bank right now. Guess who will have to pay the printer from our own money? I said when we placed an advert recently that this would be the last time I sanctioned any more money being paid by us personally. The advert has an ROI of a big fat zero. i have now pulled out of the xmas fairs I was booked to do as I will not pay for the stock required from our account with no guarantee of ever getting that money back.
Part of the problem is also that the retail shop is currently being run by the sister of the main business owner who is now terminally ill! She is hopeless at admin but I can't hassle her too much as she is trying to keep the shop afloat! Our printer himself does so little business he now works for a friend of his as a builder!
It is all so very wrong but I can't stop this roller-coaster. I have spent the last 2 days getting so hysterical that ES pretty much left the house rather than see me in such distress!
I am acting on advice from fellow mumsnetter re website changes but I now have several orders to do so I haven't time to update the website as well!
I'm 50 in 2 weeks and I never saw myself in this situation - with a man I am finding it harder and harder to love; children to whom I can't give enough attention [I missed parents evening last week - again!]; badly in debt; supporting a business that makes no money; admin'g a website data base and orders; trying to get out there and sell; no pension at all to look forward to; my friends have lost all respect for me as they don't get why I am still doing this and my parents refuse to speak to me about any of it [partly because they have been lending us ££ to pay for kids music lessons!] etc etc etc
Q: re shutting it down. I'm sorry if that sounds blunt. If you're not trading while insolvent you are sailing perilously close to it. You're not making money...You are the only one doing any work, you can't find a way forward for the business and you're bleeding money. Why are you keeping it going?
A: I have threatened to step down as a Director and got shouted down. I have sent a letter to our accountant who just says 'you need more outlets' - with no ££ how exactly do we stock any? I have threatened the other Directors with getting in contact with our ex-director who is still a shareholder, but she will probably sue us if we ask her to hand over her liability [we have all jointly + personally guaranteed our overdraft which is permanently maxed-out]. I can't close down without the other directors agreement. I called an extraordinary meeting a few months back and got told I was stupid, ignorant and had no business sense [not helped that DH thinks the same and he's a director too]
Q: re credit card machine..
A: I have said we should get rid, but was informed that as it would cost a £200 termination fee 'we might as well keep it'.
Q: you are effectively a sole trader...it doesn't sound as if there is really a way out as the more you sell, the more work YOU have to do, which puts a big fat ceiling on potential to expand & be in profit.
A: DHs idea to set up as a limited company - it was only meant to be me and a friend [who is now an ex-friend] as a 'cottage' business! He reckoned it was a great idea that the 2 of us came up with but it should be a limited company.
Q: ...call time on it & perhaps set yourself up on your own in future, ...
A: I would be quite happy to close down the limited company, keep the name and carry on on with it effectively parked on fb as it would cost me nothing
Q: doesn't sound like the others are any use even when they are pulling their weight - 50% cut for sale or return isn't a deal, it's a rip off - what on earth was your DH thinking
sh*t sh*t sh*t - when I said there was only £13 in the bank - I have just checked and our balance is now £148.63 over our overdraft!
I so want to just call time on this!
Um, this is a car crash, isn't it. What is the penalty for going over the agreed overdraft?
Can you get a grip on the payments in and out of the account and do a cash flow forecast? And tell the shop that you need the money they owe you now?
MooncupGoddess: I've just drafted a 'we have to cease trading now' letter to the directors. I can't see a way out. Now I just need to work out when to drop it as DH is coming home from a long stressful week in Swansea tomorrow and it's also his 50th birthday! How can I dump this on him?! Roughly :
I attach current rough statement of our financial situation. This is no longer sustainable ... I can no longer work like this and I request an emergency Directors meeting.
We are trading insolvent and I can no longer sustain the business on my own. We have no further money available to bail out the business.
My proposal is to cease trading immediately...to run this business sole trader [ie with me alone] and park the whole thing on facebook until we make some money or pay the whole thing off.
NO FURTHER TRADING from now ...Any orders coming in...[from the shop]...will be honoured, but we must put anything else on hold until we are paid by them and we sort this horrible mess out. I am closing down the website until such time as the issue is resolved.
How's that sound?!
On top of that, as we're overdrawn, we have now also incurred bounce charges and are now £210 over our overdraft limit. Just gets worse.
Well done OP - hopefully someone more informed will be along to comment on the practical details, but it's great that you're getting a grip and being assertive.
Sent it! sh*t - why am I constantly protecting DH because HE'S under stress!!! DUH!
I know it's hard to swallow OP bit you are definitely doing the right thing.
When you manage to wrap this up and start trading yourself make sure that you have better terms with outlets than what you're on currently.
Some people are absolute chancers.
I have my fingers crossed for you
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