I’m desperate. Will run out of money within a few weeks.

[123Holly]

I’m self employed with a shop based business. It’s seasonal and winter is my quiet time.
I usually manage to save up summer money and that keeps me going over the winter. However I had a member of staff that I discovered was stealing heavily in August and fired her. Since then I’ve just been working myself full time and haven’t taken a wage since August.
I already had taken a business loan to help with the bills but that money has ran out.
At home my husbands wage is not enough for us to live off. So I’ve been running up debt on credit cards so pay for essentials at home and for my shop. So now have £4000 on my card.
I don’t think I will be able to find money anywhere else and I don’t want to build up any more card debt. My rent will be due next month and there’s literally no money for it.
I don’t know what to do or where to turn. I’m stuck.
We own our own home (mortgaged) and I’ve said to my husband we might need to sell but he is dead set against it. That would be my last resort as well, as it is our dream home.
I don’t know what to do, and I’ve not been able to sleep well for months.
I’m stuck with the shop as I’m in a rent agreement and the landlord for three years so liable for the rent during that time.

Could you look at remortgaging? The interest in a mortgage is a hell of a lot cheaper than a credit card. If you have enough equity in your home it could be worth considering.

Have you taken any steps to recoup the money the fired staff member stole from you?

could you find someone who wants to start up a related but complimentary business and get them to sublet half the shop from you?

e.g near me, a florist sublet half the shop to a chocolatier, and that improved both businesses as people were sometimes inspired to buy both chocolates and flowers if the occasion warranted. once the businesses grew, they occupied independent premises nearby.

Don’t remortgage that’s crazy advice you’ll end up paying more over the longer period. Have you looked at any other ways of generating income? Have a look at the 10 pound a day thread- perfect if your already self employed

Talk to your mortgage company and credit card company. They may be able to offer a payment suspension for a few months (interest will still be added). Whatever you do don't stick your head in the sand, this wont go away by ignoring it.

Have you got the money back from the theiving ex staff member? If not, why not?

I’m sorry you are going through this. But I do agree with your husband, don’t use your house to bail out your failing business.

Are you sure this business is viable? Don’t throw good money after bad if it isn’t. You may need to look into going bankrupt and getting legal advice. I’m not saying do that if course! But I think you need to explore the options.

File bankruptcy for your business and get a regular job. I hope you have a limited company and are not a sole trader. If you have a limited company the company’s debts will not be your liability to pay from your personal assets (like selling a home). It will also wipe out your rental contract with your landlord.

Have you approached the landlord? If they can find someone else to take it over they might prefer that if you explain you're going to struggle to meet the rent. They might rather end the contract early than risk being out of pocket.

I would definitely declare bankruptcy if I was a limited company. But unfortunately a sole trader. Is it possible for me to change to a limited company?
The only other thing I was thinking was to ask the bank to switch to an interest only mortgage for maybe 6 months to help.
I would love to close the business and just get a regular paid job. I’ve had the business for 10 years and in the last two years I’ve noticed a decline in business. And I did think that once the lease is up I won’t renew it. The landlord might let me go early if he can let it out but I don’t know.

Can either of you get second jobs? Evenings, weekends, what ever it takes to bring in extra business? Can you start something on line, sell on Etsy or eBay?

This happened to someone I know and they had to go bankrupt. Can you sub let the shop to someone else ?

I’ve been looking at getting a second job but it’s tricky as I work Monday - Saturday. So only have a Sunday free. I’d be able to do evenings from 6pm onwards.
The only thing stopping me declaring bankruptcy is the fact I would be forced to sell our house. And it would leave us with nowhere to go. We have two children 4 & 8.
I sold my car already.

I would get legal advice then in how to wind down the business (sell off stock and equipment) and perhaps negotiate debt consolidation to reduce and pay off any outstanding debts. I agree you should approach the landlord and ask for an early release.

I would ensure your husband secure his assets as he should not be liable to pay your sole trader debts. I would look for a regular job and close the doors when that job starts.

You need legal help to go through all this and set a plan in action in motion. Don’t wait until you are past due on rent.

The only thing stopping me declaring bankruptcy is the fact I would be forced to sell our house

That is not necessarily true. Get legal advice. There are options like debt consolidation.

It’s an asset rich business and selling off the stock should cover all the business debts.
Depending if the landlord will release me early.
I’m going to need to email him just now.

Can you sell your products online? Advertise heavily on free places like Facebook. Ask the local paper to do a story on your business.

Did you report the theft to the police? What happened to the money? Can you reclaim the loss on your insurance?

Mortgage holiday, sell stuff online? Things you don’t need plus set up an amazon marketplace for stick? Negotiate rent reduction and consider giving up shop.
Sell other stuff in shop?

I hope you manage to get yourself sorted. This may be the push you need to fold a business that is not doing well before you get even deeper in debt.
In the short term, to bridge things over, have you thought of care work? In most areas, there is a real shortage of reliable kind people to provide this. It can be done to fit around your business hours for now. Evenings/twilight and weekend availability is often needed. Male as well as female carers are required so sharing the extra hours with your husband may make sense in your household.
Good luck

Here is a web page with advice

www.wilsonfield.co.uk/personal-sole-trader-debt/options-dealing-sole-trader-debts/

You can end the business without declaring bankruptcy. The debt consolidation of remaining debts can be done with an IVA...it’s like a 5yr repayment plan that you creditors agree to.

On your lease, it is typical if you ask for early release for you to only be liable for marketing costs plus any lost rent between when you are paid through to when a new tenants agreement starts. I’ve never seen anyone have to pay full remainder of term because a new tenant is always found within a month or two.

I work in property. Talk to your landlord about reducing the rent. Ask for a 3 month rent reduction due to poor trade

Yes I’m happy to sell some of the stock just now. Have put a few ranges for sale online.
But will be giving it a massive push.
I rent out stock so there’s a fine line between stuff that I can afford to let go of and stuff that I will need.

If your business isn’t keeping you, then ditch it and get a job that will.

It was years ago now, but in a housing rental contract I was legally able to get out of a contract because I found a tenant to replace me. If the landlord had wanted to refuse them for whatever reason, that was their business but I had released myself from the legal liability for the contract. Maybe similar would apply if your LL won't let you end the tenancy early, but in a choice between having a non paying tenant and finding a new one, I know which would be a better business decision.

I would wind down the business long term.

For now I would look to sell the stock online and reduce your ope shop hours to facilitate another job. It's sunk cost fallacy to be sat in the shop 9-6 or whatever f you aren't earning. Focus on bringing in cash.

Also don't sell the house of you can help it.
Good luck

Can you change what you do in the shop to exploit the current Winter conditions?
If it's so quiet, why don't you shut the shop, trade online only, and find temping/shift work to immediately earn the money for the rent?