Question for business owners

[DRWalum]

I have a small aluminum business here in Lee Co. I am hurting as well 



 But .................... I have an idea !!!





 Why don't all us business close the doors & ....................................





 go to work for " Diggenfool" , according to him we would all be millionares in just a few years   



DR Walum !!

[IXIswamperIXI]

Well I will say this, if it was easy everyone would own their own business.  Anything worth having is always going to be good old fashion hard work.  Unfortunately, it sometimes doesn't work out.

[Smoknbanshee]

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.

 

Do you really want to amortize the fees for re-structuring your contract?  Then at the end of the loan with interest and time value of money you have paid $30k, for what you could of paid $3k up front.  Correct me if I am wrong, I might be missing something here.

[Sleazy_Rider78]

Smoke,
Amortizing the loan fees over the life of the loan is only an accounting treatment that involves his company's accounting books.  I am not saying that he should include them in the borrowed amount.  By capitalizing the loan fees he would essentially be recording them as an asset on the balance sheet instead of expensing the full amount of the loan fees in the income statement.  Eventually he would be amortizing or "depreciating" the loan fees over the life of the loan through the income statement.  Hopefully I explained it well, if not, feel free to ask.  Oh, anyone who reads this owes me $300 for my accounting services.  Just kidding.  Anyway I can help, dont hesitate to ask.

[IXIswamperIXI]

Oh, anyone who reads this owes me $300 for my accounting services.

LOL I know I probably paying to much but get this our old accountant had his wife (glorified secretary) do our books.  My wife was constantly having to call them up about incorrect inputs and their answer to us was "Oh I glad you caught that just go ahead and change it" and we are trying to figure out why we should change it when they (correction HE) gets paid to do it. 

[Smoknbanshee]

Smoke,
Amortizing the loan fees over the life of the loan is only an accounting treatment that involves his company's accounting books.  I am not saying that he should include them in the borrowed amount.  By capitalizing the loan fees he would essentially be recording them as an asset on the balance sheet instead of expensing the full amount of the loan fees in the income statement.  Eventually he would be amortizing or "depreciating" the loan fees over the life of the loan through the income statement.  Hopefully I explained it well, if not, feel free to ask.  Oh, anyone who reads this owes me $300 for my accounting services.  Just kidding.  Anyway I can help, dont hesitate to ask.

Understand now.  I just got done taking Accounting classes in college, and I was like no way, but I totally understand now.  Very good idea, you definetly can do things to the books that help out in the short term and long term.

[AmericanRobster]

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.

The guy who I use to work for had about 15 people and now he is down to 8 or so. I work in the construction industry, and I have seen alot of guys who own big companies cutting back. I know a company that had about 100 guys and they cut 60 in one day.

I don't own a bussiness, but I am starting to trim my spending and trying to get cheaper insurance on my atv, along with my cell phone plan.

[IXIswamperIXI]

Its funny how you run numbers over numbers over numbers, just to help you sleep better at night.  Good luck to all... I wish I could say I know it will get better but I can't only time will tell.

[AmericanRobster]

Its funny how you run numbers over numbers over numbers, just to help you sleep better at night.  Good luck to all... I wish I could say I know it will get better but I can't only time will tell.

I work for a big construction company and I'm lucky that we have a 2 1/2 year $45 Million Dollar project on our hands. Hopefully, we will get some more work for the other guys.

[LostCause]

I too am in the construction industry.  We do commercial work.  I have seen many cut back.  Luckily we have not had to.  We have actually hired.  For the last 1.5 months we have been slammed.  Before that there was a 3 month period where we did less in the three months than we do in a month.  During the slow time we were able to get caught up on inventory and do some cleaning that needed to be done for the past 5 years.  I also took the time to rethink our service area and the contractors that we work for.  We went from 5-6 companies to about 12 we are doing work for.  This has helped increase our volume. 
I know that we will see another slow down.  The problem that we have is everyone is cutting their cost.  There was one job that I bid where another company said they could do the whole job for less than I could get the material.  The contractor wanted us to do the work but he needed a lower figure.  Long story, we didn't do the job but got to go back and fix all the mess ups.  That lead to us getting the contractors other work.
I know you need to have the volume to make payrole and pay material cost.  But at the same time you cant compromise to the extent that you are working for free.  "We have done this work for a long time and we do not need the practice any more." is a statement that someone told me a long time ago and it has always stuck with me.  Just do quality work and you will shine in the long run.  I just picked up another contractor today.
Good luck.  This is the time to rethink and restructure your vision statement.

[Smoknbanshee]

I too am in the construction industry.  We do commercial work.  I have seen many cut back.  Luckily we have not had to.  We have actually hired.  For the last 1.5 months we have been slammed.  Before that there was a 3 month period where we did less in the three months than we do in a month.  During the slow time we were able to get caught up on inventory and do some cleaning that needed to be done for the past 5 years.  I also took the time to rethink our service area and the contractors that we work for.  We went from 5-6 companies to about 12 we are doing work for.  This has helped increase our volume. 
I know that we will see another slow down.  The problem that we have is everyone is cutting their cost.  There was one job that I bid where another company said they could do the whole job for less than I could get the material.  The contractor wanted us to do the work but he needed a lower figure.  Long story, we didn't do the job but got to go back and fix all the mess ups.  That lead to us getting the contractors other work.
I know you need to have the volume to make payrole and pay material cost.  But at the same time you cant compromise to the extent that you are working for free.  "We have done this work for a long time and we do not need the practice any more." is a statement that someone told me a long time ago and it has always stuck with me.  Just do quality work and you will shine in the long run.  I just picked up another contractor today.
Good luck.  This is the time to rethink and restructure your vision statement.

What kind of commercial work do you do?  might be able to use your services in the future?  I have a good contractor base now, but always keeping my eyes open.

[LostCause]

Acoustical Ceilings

Acoustical Systems of Leesburg

[digginfool]

I have a small aluminum business here in Lee Co. I am hurting as well 

 But .................... I have an idea !!!


 Why don't all us business close the doors & ....................................


 go to work for " Diggenfool" , according to him we would all be millionares in just a few years   


DR Walum !!

Yep!  That's the way it works.  Go to work for a few years, suddenly, without ever deserving it, you're a millionaire.  Nope, doesn't take any discipline, hard work, suffering, sleepness nights or anything.  Just sit down at a desk and be a millionaire.  Jackass.

[IXIswamperIXI]

well I am still waiting on my bank to call me back with options, my accountant is meeting with me on next Friday, and now to add to everything I have to get $4000 out to pay my 7 guys their Christmas bonus.  And $150 from Michael Bob's for lunch on Friday.  I know I probably shouldn't pay bonuses this year but I just don't have it in my heart not too.  There is a part of me that would rather fail trying to make a business work knowing I REALLY took care of my guys than making the business work and not taking care of them.  THEN the argument is that at least they would still have a job.  But to be honest if $4000 isn't going to make the business fail.  Just basically means no Christmas for my wife,son and me.  And to go with out a few more things in our personal lives until things get better.  Sorry about rant, just thought I would update.

[Mike99KFX]

Swamper, how much do you gross in sales per month?  You say you have a small shop, but with 7 employees?  I have a feeling you have way to many people working for you.  Also, you're going to have to start doing some repair work yourself.  I have a body shop here in Pompano.  I own the land and the business(of course I have a mortgage).  I have 4 employees plus myself.  2 bodymen, a prepper/detailer, a secretary and I'm the painter/estimator.  When things are good, I gross between $80k-$95k per month.  Business is slow right now so maybe $70k-$75K.  Even with all the bills and taxes, it still works out OK.  My point is, after the first of the year, hire some quality people, get rid of the dead weight(you know who they are), and do some of the repair work yourself.  It will make a HUGE difference. 

[IXIswamperIXI]

I have 9 employees (Estimator, me, wife, 3 body men, painter, painters helper, detailer) I said 7 because thats how many get bonuses (not me and my wife) I have three double bays each has a frame machine and a lift. (3 frame machines, and 3 lifts) A 4th and 5th double bay belongs to paint with a mix room and a down draft paint booth. Plus 6th bay that belongs to the detailer.  This is all in a 5800sq ft building.  Lately we have been grossing about 85 a month, last year the shop averaged 133 a month.  I do have one guy that needs to go by by but other than that my guys have been here for a while and are good guys.  I also have one more guy that might go, but only time will tell.  Right now my estimator and body men are getting into it, I have about had enough of that.  (at least its not body man vs. painter LOL)  They don't want to work together, in this case I really have to say I take my bodymen side.  My estimator use to been an IA so I think he is writting light sheets but I am going to deal with that.  I wouldn't mind doing the repairs it just seems like I am spending a considerable amount of time fixing our customer service.  I know I said I have a small shop I guess it just is my comparison to other shops around here that are a lot bigger. 

[Islandbreeze07]

I'm not in the same business as you all guys are. I've been hearing my partner talk about a formula that has not been put to use with others YET. Pay for everything, generate sales, pay all bills before splitting the bottom line fifty fifty between the business and "all partners" (meaning everyone who worked within that time frame)

This would encourage all partners to find ways to maximize their cut. Of course, everyone would know up front that everyone is in the same boat, and to work hard. If not like this, move on.

And this formula seems to be working for us although we are still in the red as a business with a difference. The money is not always going back into the business but we've been putting it back in as much as we can to pay future operating costs......Just my two cents.