- Original Poster
- #1
Hi,
I started a company in june 2016. (I started out as self-employed a little over 10 years ago and changed to LTD company in 2016.) We are selling a wide range of products (mainly leather goods, hair accessories and magnetic jewellery) on ebay and amazon. Currently over 99% of revenue is coming from ebay alone.
Unfortunately, I’m facing some very serious trouble at the moment and I’m afraid I run out of options and seems like insolvency is the only way forward. To be perfectly honest, I don’t know anything about insolvency. Just started looking into it today. I don’t know how it works, what are my options or what are the consequences.
Currently all bills/suppliers/debts (monthly payments) are being paid so no one is banging at my doors just yet. The company owes around £56000 to paypal (paypal working capital). The company also owes anywhere between £10000-£15000 to various suppliers/companies. With Royal mail, we have a credit account and posting daily so the total changes every day. They take direct debit payments every week or every 2 weeks. Last payment was taken this wednesday (next one is due on the 13th and then on the 27th of march - a little under £3000 in total). On ebay, every time we sell something, we have to pay final value fees along with the monthly shop subscription, promotion fees, listing fees and paypal fees (paypal fees are deducted immediately, so the £56000 is the total we owe them). Again, since we are still selling products every day, the total amount changes every day. Next payment (£2100) to ebay is due today and will be taken within the next few days (taken by direct debit through paypal). Above that, we have 3 more invoices from ebay, for an additional approx. £5000 in total. Will be taken between the 15th of march and the end of march. With one of my supplier, we also have a credit account and we pay them once every month. Next payment (£4500) is due by next Monday (4th of March). Once the next ebay fees (£2100) are taken from our account and we pay the above mentioned supplier on Monday (£4500), the company will run out of money. We have around £3000 overdraft with HSBC (business bank) and I believe we have to use at least some of that within the next few days to pay ebay and the supplier. Money still coming in so maybe we can avoid using any of the overdraft or we can come back to a positive balance (at least temporarily) before the next "larger" amount is taken by direct debit.
Things started to go really wrong in Q4. Our Q4 was slower than Q3 and that’s not because our Q3 was exceptionally good. I expected a much better Q4 (due to Christmas) but in reality our revenue was down compared to Q3. Ever since the new year started, the business is down by 40%-50%. From around £1000 a day we went down to, on some days as low as under £500 a day. Now, we are running a 10% sale on everything (since last sunday) to get some cash in. Thanks to that our revenue is hitting the £900-£1000 a day but with the said discount, we are not making any money, on many products, we are losing money. Even if by some miracle, the business would go back to the £1000 a day revenue without discounting everything, the company should make at least £1500 a day to brake even. Probably also worth mentioning, that the Paypal loan (£56000) works as follows: There are no monthly payments, what happens is that any payment that goes in to that paypal account, 30% of that payment is deducted immediately until the loan is fully paid. Loan started from around £69000 (including interest) and it is currently at around £56000. (it also changes every time a sale comes in, 30% of that money is deducted and the total for the loan goes down). There is another big monthly cost, which is the storage. Everything is stored in a storage unit (we work from there since day one). It costs £940 a month. Paid by direct debit on the 20th.
My plan was to try everything I can with the stock I already have (I made loads of tweaking’s, this year alone, I listed over 300 new listings on ebay) and as worst-case scenario, I was planning to secure another loan (I was pre-selected for a £35000 barclays personal loan). I didn’t apply immediately because I hoped that I can figure something out without the loan. Unfortunately, despite my best efforts, I couldn’t come up with anything that would work so I went back to Barclays to get the loan but the loan is no longer available.
So basically, the business makes a lot less than it needs to break even, I’m out (well, i will be in days) of capital and out of any options.
I would appreciate if you could give me any advice.
I started a company in june 2016. (I started out as self-employed a little over 10 years ago and changed to LTD company in 2016.) We are selling a wide range of products (mainly leather goods, hair accessories and magnetic jewellery) on ebay and amazon. Currently over 99% of revenue is coming from ebay alone.
Unfortunately, I’m facing some very serious trouble at the moment and I’m afraid I run out of options and seems like insolvency is the only way forward. To be perfectly honest, I don’t know anything about insolvency. Just started looking into it today. I don’t know how it works, what are my options or what are the consequences.
Currently all bills/suppliers/debts (monthly payments) are being paid so no one is banging at my doors just yet. The company owes around £56000 to paypal (paypal working capital). The company also owes anywhere between £10000-£15000 to various suppliers/companies. With Royal mail, we have a credit account and posting daily so the total changes every day. They take direct debit payments every week or every 2 weeks. Last payment was taken this wednesday (next one is due on the 13th and then on the 27th of march - a little under £3000 in total). On ebay, every time we sell something, we have to pay final value fees along with the monthly shop subscription, promotion fees, listing fees and paypal fees (paypal fees are deducted immediately, so the £56000 is the total we owe them). Again, since we are still selling products every day, the total amount changes every day. Next payment (£2100) to ebay is due today and will be taken within the next few days (taken by direct debit through paypal). Above that, we have 3 more invoices from ebay, for an additional approx. £5000 in total. Will be taken between the 15th of march and the end of march. With one of my supplier, we also have a credit account and we pay them once every month. Next payment (£4500) is due by next Monday (4th of March). Once the next ebay fees (£2100) are taken from our account and we pay the above mentioned supplier on Monday (£4500), the company will run out of money. We have around £3000 overdraft with HSBC (business bank) and I believe we have to use at least some of that within the next few days to pay ebay and the supplier. Money still coming in so maybe we can avoid using any of the overdraft or we can come back to a positive balance (at least temporarily) before the next "larger" amount is taken by direct debit.
Things started to go really wrong in Q4. Our Q4 was slower than Q3 and that’s not because our Q3 was exceptionally good. I expected a much better Q4 (due to Christmas) but in reality our revenue was down compared to Q3. Ever since the new year started, the business is down by 40%-50%. From around £1000 a day we went down to, on some days as low as under £500 a day. Now, we are running a 10% sale on everything (since last sunday) to get some cash in. Thanks to that our revenue is hitting the £900-£1000 a day but with the said discount, we are not making any money, on many products, we are losing money. Even if by some miracle, the business would go back to the £1000 a day revenue without discounting everything, the company should make at least £1500 a day to brake even. Probably also worth mentioning, that the Paypal loan (£56000) works as follows: There are no monthly payments, what happens is that any payment that goes in to that paypal account, 30% of that payment is deducted immediately until the loan is fully paid. Loan started from around £69000 (including interest) and it is currently at around £56000. (it also changes every time a sale comes in, 30% of that money is deducted and the total for the loan goes down). There is another big monthly cost, which is the storage. Everything is stored in a storage unit (we work from there since day one). It costs £940 a month. Paid by direct debit on the 20th.
My plan was to try everything I can with the stock I already have (I made loads of tweaking’s, this year alone, I listed over 300 new listings on ebay) and as worst-case scenario, I was planning to secure another loan (I was pre-selected for a £35000 barclays personal loan). I didn’t apply immediately because I hoped that I can figure something out without the loan. Unfortunately, despite my best efforts, I couldn’t come up with anything that would work so I went back to Barclays to get the loan but the loan is no longer available.
So basically, the business makes a lot less than it needs to break even, I’m out (well, i will be in days) of capital and out of any options.
I would appreciate if you could give me any advice.
