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Thread: Our biz - to kill or not to kill?

  1. #1
    New Member TTreats's Avatar
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    Our biz - to kill or not to kill?

    Ok, so if your business is constantly running into a brick wall what do you do?

    The past year has been a nightmare, and it seems just because the date has changed from 12 to 13 is not making a bit of difference. We have a small business with one delivery vehicle, which broke down 4 times last year. So today once again its out of order. To top it all, staff who were supposed to start work again yesterday haven't arrived which made us go find someone else, because if we do not have production, we do not have an income.

    Due to the delivery vehicle being out of order so many times, we have built up a substantial amount of business and personal debt. Staff also went to the labour department and are forcing us to pay them extra money from when the bakkie(delivery vehicle) was out of commission for approximately 3 weeks due to lack of funds to have it repaired.

    Do we just keep fighting and biting the ever-increasing-in-size bullet, hope and pray for an outcome, or do we put this thing to sleep and do something else?
    Your opinion?

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    Diamond Member Vanash Naick's Avatar
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    Hi Ttreats,


    Welcome to TFSA


    The past year has been a nightmare, and it seems just because the date has changed from 12 to 13 is not making a bit of difference.

    Well, banking service fees have gone up on your account from 1 January 2013, sure you got the email or sms or both from the bank!! That’s changed!!
    The business and personal debt is worrying!
    I think you need to carefully weigh things here. If you close shop, what do you then do immediately after this?

    Try keeping it running, as liquid, as possible for a couple of months. In this time I suggest you look at getting a buyer for the business, an investor or as a worse- case scenario closing shop, but at least this way, you have some form of plan for the future as opposed to just suddenly closing shop. The way I see it is if your bakkie was operational you would have been able to meet the needs of your customers, maybe look at a way of getting it properly fixed.
    “The philosophers have only interpreted the world, in various ways. The point, however, is to change it.” Karl Marx
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    Diamond Member AndyD's Avatar
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    Quote Originally Posted by TTreats View Post
    .....hope and pray for an outcome, or do we put this thing to sleep and do something else?
    No matter what the religious people say there's no linear relationship between hope and prayer and profit.

    If transport is the main factor limiting your business then look at sub-contracting it out, at least it should then be a cost that's more proportional to your sales. If the transport headache of your business was taken out of the equation would the business be viable?
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    Dave A (08-Jan-13), TTreats (08-Jan-13)

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    Site Caretaker Dave A's Avatar
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    I've heard one of the definitions of madness is to do the same thing over and over again and expect a different result.

    Quite obviously you need to spend some serious time thinking about your strategic plan. You definitely need to change something, but exactly what you should do really needs intimate knowledge...

    Make sure you push this to the top of your priority list no matter what other "urgent -not important" matters might be pressing. When you absolutely know you're going the wrong way, you need to stop and make a plan before you take another step.

    If that decision does become "let's kill it", let me roll out another little truism - you don't have to make your money back the same way you lost it.

    The world is full of options.
    The trouble with opportunity is it normally comes dressed up as work.

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    New Member TTreats's Avatar
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    Thanks Vanash. Yeah, at least the banks keep the change "flowing" - even if it is only in their own direction.

    We actually HAVE to keep it running otherwise we will be stuck between a rock and a hard place! Bakkie been fixed properly for what ails it at the stage that it was not in running order, but it works very hard - more than 360 000 on the clock and it's a 2006 model. Things just keep on cropping up at irregular - and very inconvenient, times. Have spent over R50 000 on it last year to keep going - could almost have bought a new one!

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    New Member TTreats's Avatar
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    Thanks AndyD,

    Transport is one of a few obstacles, but definitely the biggest.

    We have looked at couriers and other ways of doing it, but we manufacture a specialised product and the person responsible for delivery has to have knowledge of how to handle it, or we lose out anyway. More on this later.

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    Diamond Member Vanash Naick's Avatar
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    Quote Originally Posted by Dave A View Post
    The world is full of options.
    Take the best out of every experience you have. That's actually what I'm personally doing with Dave's last sentiments here.. Ironic how sometimes a particular set of advice is directed at one individual yet it can be almost soothing to someone else
    I'll take what Dave says as something positive for all of us.. John Lennon put it a different way: 'Nobody told me there would be days like this!" This business of life can weigh heavily on an individual.
    The world is full of options
    When one door closes many more open up!
    “The philosophers have only interpreted the world, in various ways. The point, however, is to change it.” Karl Marx
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    Diamond Member Justloadit's Avatar
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    A mistake I made many years ago was attempting to maintain my bakkie. Fortunately, it got stolen, and with the insurance money, I used it as a deposit for a new bakke. The best investment I ever made. I made my monthly installments which turned out cheaper than the cost of immediate repairs on the old bakkie, and what do you know, I ran the bakkie for 5 years with out a stitch of trouble, traded it in for a new one, and what do you know, trouble free3 running.

    Do the calculations, go find a new bakkie to do the job that you require, get all the info from the dealership, you will be pleasantly surprised on the saving that you will have. A new bakkie will require very little maintenance for the first 5 years of 100,000Km.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
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    Diamond Member Blurock's Avatar
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    Without any knowledge about the nature of the business, the market you operate in and industry specific information, it is very hard to give advice. That is why it is advisable to complete your profile to at least get a broad idea of what you're dealing with.

    In manufacturing you look for bottle necks that slow down production. In retail or distribution you look for the biggest obstacle to doing profitable business. It is like first plugging the lowest hole in a leaking bucket.

    Transport is one of a few obstacles, but definitely the biggest.

    We have looked at couriers and other ways of doing it, but we manufacture a specialised product and the person responsible for delivery has to have knowledge of how to handle it, or we lose out anyway.
    It appears that you have already identified the problem, but you have not effectively dealt with it. Good advice from Justloadit:
    Do the calculations, go find a new bakkie to do the job that you require, get all the info from the dealership, you will be pleasantly surprised on the saving that you will have. A new bakkie will require very little maintenance for the first 5 years of 100,000Km.
    Also consider a good 2nd hand at a much lower cost.

    This appears to be your biggest problem, which has caused 3 weeks of lost production while you still have to pay the staff and the rent etc. The stress caused by this unfortunate chain of events must have had an impact on your customers, your staff, your cash flow and your own frame of mind.

    A business needs maintenance from time to time. If you don't fix the leaking roof, your stock may get damaged. If you don't replace the old diesel computer, you may just lose all your files etc etc.
    Excellence is not a skill; its an attitude...

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    New Member TTreats's Avatar
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    WE have looked at the option of acquiring a new or 2nd hand vehicle, the challenge with regard to this is that we are unable to get finance to purchase a vehicle at this point in time. This would be the best option for our business and take away one of the major headaches we are dealing with. Our financials are far from up to date and this is 1 requirement most financiers require that we know of, also we don't have the funds to have the financials audited so we are stuck there as well.

    Our most pressing challenge at this point is that our staff who we asked to return to work on 2nd January, used their outstanding debt with us to extend their leave to 7 Jan. When they left on 21 December we were meant to have payed them about R1500 each in leave pay and including our forced weekly payment owing at that date. We didnt have funds at that point and were promised by a customer who owed us R6500 that they would pay us by end December, so we told the staff we would pay them as soon as this payment came in. Unfortunately we never received the payment and my staff are refusing to return to work unless we pay this. WE can collect the funds from this customer, but only when we deliver to them again, so in effect we need staff to produce so we can deliver and collect the funds to pay them. Already because of having to pay our staff R6000 pm in back pay we have cancelled many expenses such as vehicle insurance and such to be able to pay this. Because of this extra expense, we could only pay our rent at the end of December a month overdue and we now have to choose between paying our staff or paying the rent.

    My staff and the dept of labour dont seem to want to come to a reasonable arrangement that will keep the business afloat and pay them back over time. As a result of our staff not coming as required on 2nd Jan we have lost in the region of R20000 in sales over this past week which makes cash flow during Jan & Feb (traditionally our slowest months) a really big challenge. Already our customers are unhappy because we havent delivered to them this week and we fear we are going to lose a few before the end of the week. This issue needs to be resolved asap, but have no clue how to do this. IF we pay the rent, then staff dont start, if we pay the staff we will not have funds to buy ingredients to start the week next week when they come back. Catch 22 if uve ever seen one.
    Last edited by TTreats; 09-Jan-13 at 12:20 PM. Reason: add content

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