Hit Rock Bottom

long time creeper 1st time poster

guys i have finally hit the bottom any suggestons to try and climb out

no cash :shock:
bank in the negative :x
several bad checks out there :cry:
vendors have gone COD :?
sales are about 25% down have been for awhile
have tax leins both state and federal
credit in the crapper

wasnt very quick to react but owe way to much to walk away and just say f#@*it

anybody been in this situation and get out if you want to keep iyt betwen us just PM me thanks

Joe

Joe,

You stepped into the arena… something most never do. Be proud of that…

But at this point… it’s time to hit the eject button…

You can’t defy gravity without fuel…

The sooner you let go… the sooner you can get started on a better future…

Let go… learn from this… regroup… and fight another day.

KK

P.S. Try to exit this stage with as little damage to those who’ve helped you as possible…

That’s probably really tough to hear, but yeah Joe, it sounds like the best thing to do in this situation is cut your losses. I can’t imagine you have more than a 1% chance of saving a business in that bad of shape.

Bankruptcy can set you mostly free, but it will take a few years to get rebuilt again.

Piper but like Kam said i dont want to burn anybody that has helped me to saty open overextended on vendors and they have been great to me

I can completely understand that. But that’s business, and that’s the way it goes in business sometimes. If I were forced to close the only people I would be worried about before myself would be my employees. I would do absolutely whatever it took to get the payroll covered.

After that, I would try to significantly reduce the bills to vendors to make them whole. See if they will take 20 cents on the dollar for example. That way they know you are operating in good faith and you are at least covering some of their costs.

i like that idea Piper

what if i change names and try to start fresh and try diff vendors

give it up cut your losses and run period

I think we need to know what sales are first

How bad are monthly sales, maybe there is something we are missing
You can’t just say pull the plug

Was were good sales for you and what are they now??

The question in my mind is can the store be profitable starting tomorrow? If you were to not have all this other crap hanging over your head, could you have money left over off of tomorrows sales after paying payroll, food, rent ect ect. If the answer is no, it’s time to close and cut your losses. If the answer is yes, you need to figure out what caused you to be in this position. Was it your spending habits, living above your means? Was someone stealing money hand over fist from you? If you can turn a profit tomorrow, and you can figure out and rectify whatever it was that put you in this position, you have a chance to get out of this.

To start, go to your distributor and let them know that you will do all of your invoices COD from here on and until you can afford more, you’ll pay them and extra $25 per delivery towards the back invoices. Let them know your situation, and ask them if they can look over your account and help you find some areas that you can save money on. Maybe they can trim their margins on a couple items that could save you some cash. They’ll likely only do this if they believe they are helping your business to survive and catch up on past bills.

Talk to the tax authorities! If you hide your head in the sand you’ll soon find yourself closed. If you keep your current tax liabilities current and keep an open dialog with them, they are unlikely to take action to force you to close. I recommend moving to an employee leasing company to do your payroll as it’ll likely save you a few dollars and you know your payroll taxes are being paid.

Talk to your landlord. See if he may defer a month or two rent to help get back on your feet and allow you to repay this by adding $100 a month extra to your future rent. Also see if he may be open to renegotiating the lease terms to be a little more in your favor. Right now is not the time a commercial landlord wants to see a spot go vacant.

I found myself dug in a hole so far over my head quite a few years back, and I didn’t approach it right for a long time. I stopped answering my cell phone, hiding from the landlord, vendors and taxman. I would find a temporary fix and quickly end up back in the same boat. Finally I realized how many thousands of dollars I was paying in bounced check fees, late fees, tax penalties ect. I sat down with my state tax office and set up a payment plan. They waived all penalties and interest during repayment if I kept my current obligations paid. This allowed me access to my bank accounts which were frozen with their liens. I was able to reduce the stress of juggling debts and bouncing checks left and right and I started putting my energy into growing the business and making it more profitable. Soon enough, all debts are paid, sales have doubled, the business is run much better with higher margins.

Good luck and keep in mind that the bleeding has to stop right now. If you can’t turn a profit tomorrow, just shut down and take care of the obligations you have here as you can. A good quick read to get you motivated would be Dave Ramseys Complete Money Makeover. His ideas will help you climb out of this.

I feel your pain. We’re bleeding bad right now, some nights I’m not certain we’ll be able to outlast this recession and actually see profit. We’ve cut back as much as we dare…I think, maybe time will prove me wrong there.

But I agree with the others that have urged you to be up front and proactive from this point forward, you HAVE to contact your bankers, distributors and especially the tax guys and be totally up front with them. IF you can salvage something here it’s only going to be with their assistance at this point.

Simply changing your business name and starting over isn’t an option, you’ll find there are way too many safe-guards in place to prevent you from accomplishing anything legally that way anyway.

Good luck in your decisions though!

Like others I sympathize with your situation. Like Paul asked, are you profitable today?? If so, there’s a chance you can fight your way out. If not, you’re gonna’ have to go Madoff. In either case, tomorrow is a new day with a new start!! Good luck to you!

Paul & Deacon

yes i can be profitable tommorow and cover payroll, cogs, & rent and still have a little left over for us
i think i am gonnao just what Paul said talk to my vendors and see if they are willing to try and help

thanks guys

Joe

Keep us posted Rebel. I wanna see this turn out good.

I agree with kk.
It would be nice to be able to pull this one out but you need to be 100% honest with yourself. Having no cash and your bank account snowballing backwards leaves very little options here. The vendors can be paid cod plus a little on the back, the tax man can put you on a payment program etc…the no cash thing is the one that hurts. Go to bank tomorrow first thing in the morning and have them put a hold on your account. You need to stop your bank account from sinking you. Do you have a wife or a close relative or friend who can jump in and take some stress off of you while you plug holes and bail out water at the same time change course?

Immediately work open to close and only have employee’s work when needed.
immediately identify what got you here and plug all the holes.
immediately doorhang,doorhang and doorhang - need to get revenue flowing!
immediately be honest at your product, is it above,average or below- be honest and make changes.
immediately Clean, clean and clean shop- clean windows
immediately Make sure outside shop curb appeal is up to par- cigs picked up, cups, weeds etc…

This is just for starters…

Do you have anyone in the boat with you?

pt

If you continue doing what your doing, your going to get the same results and most likely even less. You need cash coming in as fast as you can, call on schools drop off menus at local businesses think way, way outside of the box.

Call up local charities have them staff the store answer the phones and cook the pizzas for a percentage of the profit …it’s free labor and loads of advertising. It will put your name in peoples minds not as that pizza place but the place that gave back to the community that they/someone they know got to work at and brings you tons of good will and life long experience and repeat customers. Heck go one step further and require each person that works behind the counter has to have commitments for three pizzas from friends or families. Create a competition the charity that sells the most in X month or over three months gets an extra…?