Our biz - to kill or not to kill?

[adrianh]

Cool, the most important thig is to stop bleeding cash.

[Blurock]

@TTreats I am going to be very blunt, so please do not take it personally. Can I call you Sweety, as you are in the sweets business?

Very valid comments made by Adrian. In simple terms; Income - expenses = profit. If that is not enough, the business is not worth saving. You have been at it for 14 years. The income from the business must have been good for you to continue. So where did it go wrong?

Doing deliveries is costly. Have you calculated the real cost of the deliveries and factored it into your prices? Giving credit may also be a problem. What did it cost you to give your customer R6500 credit? R20,000 in lost sales! Not only the opportunity cost, but also the problems caused by not being able to pay your staff, rent and a salary to yourself? The added insult is that you have to do the next delivery before collecting the outstanding amount! This is not on. The money is owed to you and the customer can do an EFT. Collect outstanding debtors NOW.

You can not get credit because your financials are not up to date. This is a basic mistake. Your husband is a qualified accountant. Surely he could have sorted out the financials? Can we get it done ASAP? Why does the AFS need to be audited? This is not a requirement for a small business?

As Adrian suggested, go and do your school project. Do a business plan and critically look at the business from all angles. Pay particular attention to your costing. The price of sugar and fuel increases all the time and you may have to adjust your prices more than once a year. If you want to run a business, you have to be committed and pay attention to detail.

You have also started a networking business. Is this not distracting and interfering with your existing business? Don't you like the sweets business or what is the reason for starting another business? Do you still have your eye on the ball and is your heart still in it?

[adrianh]

Killing a business and restructuring it is not a mark of defeat, to the contrary, like playing poker you need to know when to hold and when to fold. It is all part of the long term game.

I agree with Blurock, there is absolutely no excuse for not have proper books. You cannot plan the future unless you record and fully understand the past. Bookkeeping is the manner in which we record our business past. If you do it well you would also record the price movements of your opposition, that would clearly show where the market is going in the long term.

What is most interesting is that you are suffering from poor business management rather than poor products or poor customers. If you do kill the business and start over then you should consider the importance of business management vs products. There is no point in starting another poorly managed business with brilliant products.

I also don't think that basic business management is particularly difficult, it is a matter of constantly keeping the books up to date and continuously doing the math in a spreadsheet to ensure that you are staying within your financial constraints / projections and budgets.

Us, me included, are artists, we want to make stuff and sell stuff because we enjoy the act of creation and sharing that creation with others....unfortunately that doesn't keep the wheels of small business running unless we learn to become smart business people. I also think that running a business successfully is also an artform.

[Blurock]

What is most interesting is that you are suffering from poor business management rather than poor products or poor customers. If you do kill the business and start over then you should consider the importance of business management vs products. There is no point in starting another poorly managed business with brilliant products.