Question for business owners

[IXIswamperIXI]

Have any of you worked a second job WHILE owning your business just to help make ends meet?  I have lost a lot of seep thinking about ways to lower my overhead including not taking a paycheck (which I have stooped) and lowering benefits but I think I would rather work a second job than go back and tell my guys I can't afford to pay full benefits anymore.  I guess today I am going to shop around for a new Garage Policy see if I can lower that.  Go from a 1.5M DSL to regular, lower our nextel plans, and try to lower any bill I can.  Next step is to start selling my personal stuff so I don't have to take ANY paychecks at all for a little while anyway.  Sorry for the rant just thought I would ask a question and started going on and on LOL

[NYRAPTOR]

put some oil slicks in front of your shop!!! its SLOW out there bro.

[Mrs.Nightbreed]

We have been in bad positions a few times in the last three years and thought about getting a job outside the shop to make personal ends meet and decided against it. We don't have employees yet. For now it is just Mike and I. Doing what we do, we decided it is better to spend extra hours here to get more done than get an outside full time job. I figure any job I get would bring home 400-500 a week max. We can do one extra job a week and bring that in so it is not practical to spend 40 hrs elsewhere for money that we can bring in in 8 billable hours. Also, it will mean you will be away from your business all week. Who will run thing? Will it slow production not having you there? That can cause a whole different set of problems.

Have you considered taking whatever money you can cut from bills and using it for some local advertising to bring in more work. I know it is more money to spend but if you make twice what you spend it can be worth it in the end. Also, you can look into small business loans or lines of credit to get you through the rough time. We have never had a bank loan or line of credit for the shop but I think it would have helped us through some bad spots over the last few years.

Who is your phone internet  provider? We had different places for everything and recently switch EVERYTHING to Embarq and it saved us a lot of money. We have both shop lines, three cell phones (no two-way), unlimited long distance on the land lines and unlimited DSL all on one bill. You can call Progress Energy and set up your bills to take all your electric bills for the last few years and bill you the monthly average all year instead of dramatic increases in the summer/ dead winter. Call vendors that you have had a long relationship with and see if they are willing to cut your cost by 5-10%. Sometimes the longer you are established with them they will do that. There are a lot of ways to cut costs. If you can cut everything even a tiny bit it adds up. If you are out of contract on your merchant company, look for lower rates elsewhere. We just switched and went from 2.2% to 1.75%.

I know this was long but I hope it helps or maybe gave you new ideas. Don't give up! I am sure things will get better soon. 

[Turboderf]

yes times are bad i work for myself also for over 6 years its a small car repair and i though about going back to a dealer to work but the time i would put in 6 days aweek and make the same or less i just going hang in there times are hard and i think times are going get harder thanks mr bush

[Mudneck]

I buy & sell houses/realtor. I'm sitting on 3 properties that I just spent $$$$ re-habbing.Who knows how long I will have to carry them.I haven't sold one since last December,basically no pay check since then just savings.I feel your pain.

My thoughts, Sell what  you need to survive. DONT work for anyone else for a few dollars when you can put that time & energy into changing your business plan.Look for different ways to expand different services to offer,sell whatever.If you cant do it after giving your 300% than it may be time to pack it in & work for someone else and close up.

Good Luck times are tough!

[budman]

I've considered a second job in my same trade, cuz I can probably make more money working for somebody else right now. But the printing industry is real slow down here. I have been weathering this storm for so long, but I hope it picks up soon. Every couple years times get tough and a lot of print shops go under, and I still hope it's somebody else. Maybe a thinning of the herd will help my cause.   

[VForcedave]

Ride it out the best you can. Most small business owners are thinking the same thing you are. You are not alone. Look at your businees model and adjust. Hang in there. After the elections, it will start coming back in some sectors. Good Luck.     

[IXIswamperIXI]

thanks for all the replays, I have already got a maxed out revolving line of credit, and I am pretty sure I can not get anymore due to the fact I maxed out myself trying to buy the business.  I bought a Body Shop that my wife has been running for the last 7 years so I don't have to be there all the time.  Right now I am just a glorified book keeper - gopher - delivary guy - detailer.  I am a licenced electrician I left my trade to help my wife (and work for myself) but I left on very good terms with my old shop (they will hire me in a heart beat) And to add to all this we have a 3 week old baby.  When I look at our books we are ok to say the least BUT this summer we are fixing to hit is not going to be good unless we get A LOT better SOON.  Our loan we took to buy the business is only a five year loan so our payment is HUGE to say the least, if we can just get through this first 5 years we will be fine.  Anyway thanks again for the ideas I don't really have anyone to bounce unbiased ideas off of so I thought I would ask on here.

[SWAMP_DONKEY]

I know what you arw all going through. Health insurance alone is enough to choke a horse. The Car Lot has been slow and alot of prayers going up everyday that we can hang on. I know it will pick up soon we all have to try and help eachother where we can. When I get down I think about my sons smile and that always makes me happy.... coming home to that everyday puts it all in perspective. Good luck to all of us.

[qt314nfla]

I can certainly relate to what you're saying.  I have gone many months w/o a pay check and off and on have to go back to not taking one.  I'm fortunate that I've thus far been smart w/ my personal over head.  As for the business, in January of last year I thought I was gonna have to close shop.  I looked at all the expenses going out and got rid of anything that wasn't necessary or that I could live w/ less.  I have no staff like the Nightbreeds so it helped keep my overhead low.  Like the rest I did consider taking another job.  Again like them I realized that I'm not going to make near as much money working for someone else as I could if I rethought my business strategies.

I wish you luck and if there's any advice I can offer I'm more than happy help.  Not sure how much good it would be but w/ a bunch of ideas maybe you could pick out a few that would help you pick up.   You might consider seeing if you can change your 5 yr loan for a longer loan.  I know it's not a pleasant thought but it would lower your over head and reduce your stress until the business picks up and you can start paying it off as you originally had it set up.

[IXIswamperIXI]

I wish you luck and if there's any advice I can offer I'm more than happy help.  Not sure how much good it would be but w/ a bunch of ideas maybe you could pick out a few that would help you pick up.   You might consider seeing if you can change your 5 yr loan for a longer loan.  I know it's not a pleasant thought but it would lower your over head and reduce your stress until the business picks up and you can start paying it off as you originally had it set up.

I really liked the idea of paying it off in 5 years and really start putting money away after the 5 years, I might just have to extend the loan BUT to start with they would not give me a longer loan because of my equipment (assets) would not justify a longer loan. (whatever that means LOL)

[IXIswamperIXI]

Thanks for the kind words everyone, I sure I will figure something out.  There are many solutions just trying to find the best is whats hard

[Smoknbanshee]

I wish you luck and if there's any advice I can offer I'm more than happy help.  Not sure how much good it would be but w/ a bunch of ideas maybe you could pick out a few that would help you pick up.   You might consider seeing if you can change your 5 yr loan for a longer loan.  I know it's not a pleasant thought but it would lower your over head and reduce your stress until the business picks up and you can start paying it off as you originally had it set up.

I really liked the idea of paying it off in 5 years and really start putting money away after the 5 years, I might just have to extend the loan BUT to start with they would not give me a longer loan because of my equipment (assets) would not justify a longer loan. (whatever that means LOL)

It means the projected life on the equipment will be up, so they expect you to replace the equipment with new.  All goes back to the depreciateable life on the equipment.  Most small shops don't really replace at end of the life expectancy, they use it till it breaks, but in the manufacturing industry, we usually can justify replacing a piece of equipment at the end of its depreciateable life, with reduction in maintenance cost, improved efficiency, etc.

I have to assume that you had an assessment done, or the loaner did, you might try to have a different loaner have an assessment done.  Sometimes that can be a biased opinion.

[IXIswamperIXI]

Yea the equipment was almost depreciated all the way but the way the sell of the business went down the previous owners sold the equipment to me personally then inturn I sold it to my company thus starting the depreciation all over (according to my $300/hr accountant) I have my bank running the numbers again so maybe I will be able to the loan longer now.

[Smoknbanshee]

Yea the equipment was almost depreciated all the way but the way the sell of the business went down the previous owners sold the equipment to me personally then inturn I sold it to my company thus starting the depreciation all over (according to my $300/hr accountant) I have my bank running the numbers again so maybe I will be able to the loan longer now.

If the equipment was almost fully depreciated, I hope you got a really good deal on the equipment.  Once it reaches the end of depreciateable life, it is usually sold at scrap value.  $300/hr accountant, maybe I need to change my major from management to finance.  Hopefully the bank can rerun the #'s and help you out.  Another thing you might try is to have the actual equipment assessed by an approved bank vendor, explaining the condition of the equipment.  Before they do that, make sure the equipment is working in tip top shape and is very very clean.  That might persuade the bank to extend the terms on the loan.  Condition of the equipment and housekeeping of the shop weights heavily on the equipment assessment.  If you have good housekeeping industry standard is that you take care of your equipment just as well.  Also, think about getting a short term loan on equipment and a seperate long term loan on building and property.  Not exactly sure how your loan is structured right now, but two seperate loans might work out to benefit you best with a lower interest rate on either one.  Hope it works out for the best.

[IXIswamperIXI]

Thanks again for the info. we bought just the right, and assets to the business.  I do not own the property yet, it was explained to me that is his retirement so he would not even discuss with me about an opportunity to buy the property.  Which REALLY sucks I am in a triple net lease so I am paying on it as if I owned it.  These guys at the shop take pretty good care of the equipment so it wouldn't take much to get it shining.  We here time in and time out that we are the most well equipped shop for how small we are.  When I talk to the bank again I will ask about having someone coming out and assessing the equipment.  Oh, the equipment is on a new 7 year deprecation schedule now so thats what I am hoping helps.

[IXIswamperIXI]

Another thing about me going to work at my old shop, is that they have a family medical plan (which I have a 3 week old now) and here at my shop I pay a flat rate of $400 per person so I could save $1200 a month by putting my wife,me, and my son on thier plan.

[Smoknbanshee]

Another thing about me going to work at my old shop, is that they have a family medical plan (which I have a 3 week old now) and here at my shop I pay a flat rate of $400 per person so I could save $1200 a month by putting my wife,me, and my son on thier plan.

health insurance has long been overlooked as a benefit, but now has become one of the most critical points in deciding where to work.  I forsee health insurance benefits being minimized or more of the cost being put on the employees in the future, due to the rapid and steady increase.  I don't know your complete situation, but health insurance would be a big deciding factor, almost more than a salary in this day and age.

Yeah, that is good that the equipment is on a new depreciation schedule, and if it is, that might help with the back refinance.  I would almost be willing to bet, that when the equipment was first financed it was on the old depreciation schedule.  I would think that you could atleast finance the depreciatable life, which is 7 years as you stated.  Again good luck with the complete situation.  And tell the land owner to sign the deed over, so you have the equity to finance against.  That would of made things a WHOLE LOT easier.  Equipment financing can be a pain in the a$$ most of the time.

[IXIswamperIXI]

not to sound dumb here but when you said  "And tell the land owner to sign the deed over, so you have the equity to finance against" was that a joke or a viable option, where he owns it and the deed is in my name?  Man this really makes me look stupid    Because right now it is just not an option for me to buy the property.

[Smoknbanshee]

not to sound dumb here but when you said  "And tell the land owner to sign the deed over, so you have the equity to finance against" was that a joke or a viable option, where he owns it and the deed is in my name?  Man this really makes me look stupid    Because right now it is just not an option for me to buy the property.

It was a joke.  If your name is on the deed, you own it.  I doubt seriously he would sign the deed over, without a well drawn out contract to buy in the future at fair market value.  If you did indeed have your name on the deed, you could refinance the property (15 to 30 years) to pay for the equipment loan.  Another thing you could try to do would be to purchase the property on a 30 year note and roll the equipment into that.  I would however not recommend this, because then you would have a 30 year note on equipment that would not last that long, so theoritically you would be paying on equipment that was obsolete and replaced.  I am surprised that your accountant has not recommended a viable option, since he is dealing directly with your income and expenses.

[IXIswamperIXI]

I have a meeting with him on friday but 300/hr is hard to swallow though LOL well thanks for all the info 

[Smoknbanshee]

not a problem.  I have an manufacturing industry background, so don't know too much about the general automotive end of things.  I just work alot with modifying, buying, replacing, repairing manufacturing industry equipment.

[Young Gun]

My dad is the supervisor of a plumbing company and boy is business hurting.  They had a crew of about 15 guys, now they're down to 3 including him.  Even with just 3guys you'd think they would have work to do... probably 2 out of the 5 work days everyone goes home because there is nothing to do.  They won a bid though on a new office building which should keep them in work for a few weeks.

Also I remember him saying that a major plumbing company in the area that had a crew of around 150guys is now down to 20 or so.  Crazy.

I would do what others said and advertise.  I have seen a lot of people putting magnetic vinyl advertisements on their personal vehicles which seems like a good idea.

[Sleazy_Rider78]

Swamper, 
Before you try and re-negotiate the terms of your business loan, try a couple of these ideas.
Try asking some of your vendors to extend the payment terms for invoices.  If you can successfully delay payments then you can conserve cash and keep more money in the company.  I understand that most vendors have payment terms of 30 days.  See if you can negotiate the payment terms to 45 or even 60 days.  Just don't forget to pay them or else you may get some nasty phone calls from them demanding payment. 

Also, look at your receivables aging.  If you have a lot of receivables that are 90-120 days outstanding you should get on the phone and try and get payments from your customers. 

Continue to try and cut your costs or maybe sell some of the business assets that you don't need or never use.  The only bad thing is that it sounds like you may have used some of the business assets as collateral in which you will not be able to sell them. 

When those don't work then talk with your lender.  Believe me they will be willing to work with you.  The last thing they want is for you to get into financial difficulty and not be able to pay down the line of credit.  The only thing I was trying to avoid with having you go to your lender last is that I am sure they are going to charge you some fees in connection with re-negotiating your loan.  Which, if they do charge you fees for re-negotiating your loan, tell your accountant to capitalize them and amortize them over the life of the loan.  (Some free accounting advice for you).  Good luck to you, and don't wait until the very end to talk to your lender but try the other things first.

 

[IXIswamperIXI]

No I am not waiting I already have my bank working on any ideas she can come up with.  Its not that I am hurting right now its that this season I have not been able to put money away, I have only made enough to pay off my debt from last slow season (summer), and now with hardly any money put away in a few months (about 6) I Am going to be in slow season again (summer) this is what I am worried about.  I have always believed "No one plans to fail they just fail to plan!" Anticipation and planing I think are keys to successful business. (among many more)  This may all be for nothing if (and I mean BIG IF) I have an outstanding 2nd half to season it might be just fine BUT I rather plan and try to have it all figured out.  It really helps listening (LOL reading) to everyones thoughts.  THANKS!

Brad
IXIswamperIXI