Is it time to call it a day?

[www.sitepal.co.uk]

Going it alone is one of the biggest decisions that you will ever make and ensuring your venture is a success is definitely hard work, but can be very rewarding.

However, there will come a time when either you wish to leave the business or the business reaches the end of its trading life.

It is important to have an exit strategy for yourself and a plan for either the continuation or closure of the business.

Research shows that after six years, eight out of 10 start-ups will no longer be trading due to financial failure.

My friend has just stop trading and has alot of debt now with nothing to show for his time and money.

I suggest to him that he re-mortage so that the debt is payed off.

I may of given the wrong advice? but i said that if its part of your mortage perhaps that sum owed on its own will not remind him of the business failure.

I think that the banks make it worse by the way they make going into business a easy process.

True they make it easy to set everything up but soon lose intrest when the going gets tough.

Is making money easy?

[fastfences]

Hi Tony.

I wonder if we should look at what has happened during the 'good' 6 years. Did the fire extinguish and send us into a downward spiral? Did we not keep abreast of products and competitors? Did we siphon of too much money from the business, thereby causing cash-flow problems?
Perhaps we should look fiercely and analatically at our business frequently, then they won't fold and become another stat.

More to your point; I don't have an exit strategy? Why would I? I don't plan to fail or be negative enough to think,'What if this doesn't work?' that may sound a trite 'bigheaded', but it's always worked for me because I can make little adjustments and alterations to my strategy along the way.

To your final question: No. It's easier to work in a bank, at Mcdonald's, or for the council. But do we do this for 'easy' money? Hardly!!
Cheers, Nigel

[Rob Holmes]

Thanks Tony,

The main chunk of the original article is also here: http://news.bbc.co.uk/1/hi/business/3116628.stm

:roll:

As for the part regarding your friend..

The first 3 years Matrixx Hosting didn't make a profit. In fact we made a loss :) Now we make a healthy profit and it's my belief from chatting to alot of other small businesses that most businesses take 3 years to gather momentum.

He should always run his financial decisions by his accountant as (if they are good) they might well have other suggestions or just confirm your advice and his decision.

It's not the banks fault for him going into business - or theirs he failed. They just let him have a bank account - it's his business concept and plans, forecasts, SWAT analasys, 4 P marketing plans etc etc that failed him.

And in answer to your last question is making money easy - the answer is yes and no. Depending what you do.

Rob

[Mortime Business Software]

I can't understand how any business can run for six years and still be in debt, if it lives within its means.

So many times I have seen people skipping and dancing through the front doors of their nice, shiny new business. They wear flash Italian suits, have the very latest mobile phones and computers, drive spanking late model cars and use the most expensive designer furniture they can find.

I witnessed this sort of behaviour numerous times from the top of a ladder while I was installing their new signs (the price of which many of them hadn't even haggled for).

After a few years in signs, I could pick the ones who would fail more often than not, because I could see they were in it for the image more than anything else. And thus, so many times I saw these suited-up pratts trying to exit, sometimes within a matter of months! Most of them would of course blame it on banks, interest rates, an economic downturn, increasing costs, etc., but really it was due to their total lack of interest and common sense.

I think it is easy to make money in business, as long as your product is in demand and you're sure that you can compete on price. Advertising which is appropriate for the business is also necessary.

Business is not rocket science.

Immediately after I sold my signs biz, and just before I started share trading, I started a small pine furniture manufacturing biz. I didn't do anywhere enough research and it failed after three months. The problem was that I found it impossible to undercut the big players who were buying shipping container loads full of timber, at rock bottom prices, from illegal timber barons in Asia who were (and probably still are) raping the rain forests. I didn't have enough money to buy such quantities even if my conscience would have allowed it, so I sold off what furniture I had made at a meagre profit, and after three months was out of it. I reckon anyone starting in this game would need at least half a million just to start them off.

Therefore I agree with Rob when he says that making money can be easy or difficult depending on what you do.

By the way, what does your friend do?

Dave

[Dread]

Is making money easy?

I seem to find that making money is easy if you already have money. If you dont have any money then making it is quite hard. Thats how the rich make themselves richer! Theres money in money.

[JoyDivision]

My business is making profit but only just, my wages are currently £60 a week but I have about £100 in the business bank account from customers.

It is still early stages but marketing has been neglected recently due to some tricky jobs and other commitments.

Last week I made about £120 profit, this week that is just £50. It is too early to start getting worried though.

[Rob Holmes]

Is making money easy?

I seem to find that making money is easy if you already have money. If you dont have any money then making it is quite hard. Thats how the rich make themselves richer! Theres money in money.

Guys - you don't need money to start making money..

Find a consumer need, find a product that fulfills that need and sell the product to the need at a profit.

Thats all - dead simple !

Rob

[daveashton]

Money does make money.

I remember when we just started out that we could not book flights to see a prospect until a cheque cleared.

I can not remember the exact amount but I do remember the flights costing more because we paid late.

Same thing with the bank. 2p over the overdraft and big fines. Now we don’t get any.

As for making money, most people do not have the skills to run a business so just because they can make or do something and have a great idea does not mean they will be successful.

To be blunt I am glad we are now stable and would hate to go through what a lot of people on here are. We have had times in the first 2 years when cash flow nearly killed us and created lots of daft problems because we did not know any better.

Now we have more people with more skills and better people giving us advice and the difference is amazing.

Anyway good to see you are still around, how is business for you?

[Rob Holmes]

Anyway good to see you are still around, how is business for you?

Unsure who you're asking Dave?

Rob

[daveashton]

Tony

Not seen many posts from him on here or other nameless forums!

[Hedgehog Toys]

From my point of view, i started my online toy shop with next to nothing. It has cost me the price of a template website provider, a domain name, and alot of legwork finding suppliers. In terms of stock, i hold very little as 99% of things i can get within 48hrs delivered to me once i sell them. So for a company to fall into heavy debt after 6 years smacks to me of poor financial management. :(

[DarrenC]

Rob, is right, you don't have to have money to make money. I started my business because my parents bought a holiday home, and 4 years later, I have 1,000 homes for rent - never imagined it would get to this stage, so I don't have an exit strategy, and hope I don't have to ever be in that position.

[Pebble Communications]

Hey let's stop picking on the poor guy whose business failed, for whatever reason! A lot of businesses fail.

I actually think that we should all have an exit strategy (although I must admit I don't have one!) at some point. I don't want to carry on working till the day I die, so at some point I'll have to either sell my business, close it down, or take myself out of the management of it. If you want to pass your business on to your kids there might be inheritance tax implications unless you do it in the right way. It doesn't hurt to be prepared.

[MorethanWords]

Have to say I'm really glad I read this post. I've been having a few doubts about myself as business isn't building up as quickly as I'd hoped. These posts have made me realise Rome wasn't built in a day! Obviously you have to be proactive and make things happen, but I shouldn't put so much pressure on myself to become an instant success.

Also agree that you should have some kind of exit plan, but kind of feel that it is a little negative to think that way when i'm in the early days!

[cqueen]

I am also glad I have read this post.
Ive only been in business about 6 months, I've completely run out of cash, although I am owed money by two companies who havnt paid up yet.
Not having a penny kills your self esteem, slow business means alot of empty days of worry.
It's my dads birthday today and I cant even buy him a card!
The bank wont give me an overdraft because I failed thier credit check :roll: - even though I paid off my £1400 student overdaft in full just so I could open a business account.
I guess Ive just gotta stick with it, but the temptation to quit is lingering in the back of my head somewhere.
I really don't want to quit.
Can anyone sugguest a part time job which would allow me to work whatever hours I wanted with no notice? I.e. work from home maybe?

[UKRobin]

Going into business is like going into the bookies, just DON'T gamble more than you can afford to lose!

[Cornish Steve]

So many times I have seen people skipping and dancing through the front doors of their nice, shiny new business. They wear flash Italian suits, have the very latest mobile phones and computers, drive spanking late model cars and use the most expensive designer furniture they can find.
If we read the history of successful startups, they are almost all frugal. Right before its IPO, eBay expected new employees to build their own office furniture. It's absolutely essential that companies are careful with their spending. While true of all companies, it's especially true of small companies.

Also, research (the work of Jim Collins in particular) shows that the best CEOs are quiet and humble. While they are very driven, they can be termed servant leaders. I always distrust flashy offices, flashy clothes, and arrogance.

[c4l]

CQueen - where are you based??

I may have the answer!!

[cqueen]

Norwich...

What's your answer? :)

[WakingDragon]

Can anyone sugguest a part time job which would allow me to work whatever hours I wanted with no notice? I.e. work from home maybe?

Start your own business! ;)