Fincancial Problems - no income, overdraft limit approaching

[RegMolehusband]

So let's say, hypothetically, that I have a promising start-up business that hasn't paid me a penny yet largely due to the economic downturn, that I've put thousands into and that is just drifting along in an overdraft - and I'm approaching my personal overdraft limit. I have no more significant assets to sell but I do have equity in my house.

In this hypothetical situation I would be demotivated and considering myself well and truly stuffed. I would have arranged to see the bank manager a week on Tuesday (hypothetically) to appraise him of the situation.

What would you do? Please avoid Smartarse answers if at all possible. Thank you.

[svm]

Try and get yourself some part time work to boast your income? That's if you think the business is worth saving.

[DavidY]

RegMolehusband

Being blunt, I would suggest that your 'promising' startup business isn't quite so promising.

You need to take a long hard look at your business, create a realistic forecast, then halve it, does it still work? Review it with others, etc. If it's going to work you need to raise the finance to get the company into profit. (Overdraft Increase, Loan, SFLG loan, Business Angel cash input, etc)

Regarding your personal overdraft/mortgage, you need to look at this seperately from your business, if you have a spouse/partner and children, your priorities will be totally different than if you are young, single and easily employable.

Above all you must be honest with others and yourself (and don't finance the business through loans on Credit Cards!). Maybe the time isn't right now for this type of business, maybe you need to revisit it in a few years time.

You might have been better posting this in the Business Section.

davidy

[mybrainhurts]

svm said:

That's if you think the business is worth saving.

That's the key. If it is, and you can convince the bank manager (is there such a thing?), she ought to offer you funds secured on your house.

But is it going to work? If you get the funds and it goes tits up, you're stuffed.

[BigLepton]

My advice would be to cancel the appointment with your bank. Do not appraise them of the situation. They will provide no help and will try to shut you down immediately. If shutting down is the correct choice, make it yourself or with the advice of someone independent. Do not inform the bank until you have decided what you want to do.

Banks are not your friend and ally, and having been breathtakingly incompetent in administering their own house and having been bailed out by your taxes, they are currently running a ruthless 'shut down anything that may cause us a loss' policy.

Do not give them the opportunity to make your business decisions for you.

[MrV]

Dare I say it but go and sign on.

[Gunny Sergeant D]

BigLepton's probably right. If you do go into to see your bank make sure you go in with a cashflow forecast and if you have one, a business plan.

The most important thing is taking stock of the situation. Is the business real i.e. can you see real growth that will be able to generate a decent ROI? Some people confuse a nice idea with something that doesn't have a market. What do you need to do to grow the revenue and do you have the resources / plan to achieve this.

One of the hardest decisons you can make is to close it down, but that might be what you have to do. If you share what the biz does you might get more advice.

Good luck.

[sparkythecat]

There'll be a new series of Dragons Den soon.

[172ff]

Find a horse at 100/1 and put on £5000 to win. You'll be quids in.

[skeggysteve]

You will never regret some thing you did that failed more than you will regret some thing that you did not do for fear of failing.

[RegMolehusband]

Thanks all - several interesting things to think about tomorrow