Insolvency?

[Mr B]

Hi all.

I'm a newbie here and in desperate need of any advise.
i have a transport company situated in Cape Town. We have been in operation since 2005. It's been a real exiting journey with many challenges, especially financially.

Although my "sales" have always been escalating, it has just never been enough. I have exhausted all of my resources and really have only one option in mind, to close down.

Basically i was hoping if anyone could give me some advise on closing down. I'm not sure if selling is an option as the time frame is abit snug (if you know waht i mean)

ANY help would be graetly appreciated.
You welcome to mail me on movers@telkomsa.net

[garthu]

Hiya Mr B and welcome!
Sorry it seems to be under stressful circumstances. There was a very specific detailed article re this which i will attempt to find as i aslo considered it one point recently!

[Dave A]

It's a big subject. If I was to give any kind of over-arching advice, it would be that if possible you need to control the process. If you hand the process of winding up to liquidators... Well, they're not very good at making sure all assets realise their best value. Savvy creditors should prefer a carefully managed windup as everyone ends up getting more money than they will with a liquidator in charge.

Getting specific, the first question is how are you structured? Sole proprietor, cc, company?
Second - excluding monies that might be owed to yourself personally, do liabilities exceed assets?

[garthu]

I did finfd the articles but it's print! Thought it was a web.. sorry about that Mr B. You know what thought did.....

[Mr B]

@ Garthu:
No problem, today i will also try to find some info on the site. thank you for your input and trouble.

@ Dave A:
I'm the sole member of the CC.
My books fell behind abit but is up to date just need to collect my financials (and obvoiusly pay).
But if i do a calculation, unfortunetly, yes my liabilities do exceed my assets by about 50k!!

i am trying to control this process as far as i can, feels like i'm sinking though.

thank you all for your input.
any further suggstions DaveA?

[Dave A]

Sometimes I wonder if a business is in trouble because the paperwork isn't up to date rather than the relationship being the other way around. Whether you wind it up or rescue it, you're going to need a clear head and a crystal clear picture of the numbers.

Stay on top of the books, no matter how uncomfortable you might feel about those numbers. Hard numbers help you make the tough decisions!

R50k is not a lot given the likely total capital involved. A few good months could wipe that out.

Any chance of turning the operation around to profitability?

[Mr B]

i actually work those figures everyday. i also do keep track of those hard numbers, cause as i see it only working with the absolute correct amount, will bring an accurate decision.

Dave A, this business has so much potential and not to fool myself, but i do strongly believe that it is in a position to be profitable. The problem however started with me having left my full time job and bringing all the "salary paid expenses" along. i then had to first focus on fighting off those expenses, and won. Then had a very huge vehicle maintenace account for several months, purchased something new, and and that point business was well as i bought another vehicle to service the extra business. That also helped pay the maintance owing. but did not completely finish all due yet.

The problem came in when i lost the work given to me due to restructuring by one of my sources. Kept onto the vehicle whilst sourceing work and eventually fell deeper and deeper.

This business suffers in the winter months so basically for 4 months we are already slow, thus the extra vehicle wanted to do distribution to warehouses, so basically the good months covers the late payments and the cycle starts all over.

The hard part for me is knowing that if it were not for the "extra" expenses, this business would be able to cover all its expenses with profit and month end.With all the resources now exhausted, it is just getting that much harder to keep afloat.

[wynn]

What about selling the second vehicle now to reduce your overhead, plod along with the original vehicle, then hire any extra vehicles you require during busy periods to service your extra demand?

[Mr B]

Thanks for your response Wynn.

I am trading in the one vehicle on Thursday. (But they only settling so wont have cash that i can use)
paid up an o/d to save some bank charges. However inevitably i'll get to a point where i can only do so much. There will still be some expenses that i won't be able to get to.

The worse thing here guys are... The state of mind one finds oneself in. Thats my worst enemy at this stage.
If for what ever reason i cannot save this business i really do hope that there is someone out there right now finding themselves in this same situation, that was actually motivated or got something from this thread/reply's so far.

[Dave A]

So many thoughts come up... Here's two quickies:

The line between success and failure is a lot thinner than most people realise.
There are very few successful people who did not at some point along the road think they might lose everything.

Mr. B - I see lots of positive signs.

Don't give up. Dig in. Dig deep. Make it happen!

[Mr B]

thank you for your encouragement Dave A

Will keep you guys posted on my progress.

[Dave A]

Well, now that I've got a bit more time, let's try to make sure we don't send you off blindly trying to charge through walls.

Obviously we don't know each other well enough for me to get a sense of exactly where you are right now, but perhaps you can relate to this next bit anyway.

My experience when you're under pressure like this is that it is not only your bank balance that suffers, you're under pressure psychologically too. If you are depressed; if you are not positively expectant, it starts to show in your results (which hurts the bank balance) - which leads to more depression which leads to worse results... it's a spiral that needs to be broken.

Now when your back is to the wall, pumping in money to break the spiral is generally not an option. Often you've already been through that anyway and it hasn't worked by the time you start feeling really down and tired.

You need to top up the emotional side of the equation to start getting better results.

If you can relate to this, there are two books I strongly recommend you get your hands on immediately - Attitude is everything by Jeff Keller and The magic of thinking big by David Schwartz. I've given the link on the Jeff Keller book because I see it is available for purchase as an eBook. The site also outlines the chapters and gives you an idea of what you're in for.

Read something positive for at least 15 minutes every night before you go to sleep and let your subconscious start working its magic.

My other tip for attacking the wear and tear on the psyche is to smile - no matter how much you are hurting inside.

I used to warm up my smile muscles on the way to seeing any client. Don't worry if you look stupid in the rear view mirror - just thinking how stupid you looked will produce a genuine smile when you're in front of the client. And it's infectious. It not only warms up the people around you, it also starts seeping inside no matter how chilly things are in there.

And not a tight lipped smile. I don't care how bad your teeth are, flash some ivory!
(Just make sure they're well brushed first, OK )

Give it a whirl - It's not like it's going to cost you much so what have you got to lose?

[Mr B]

You guys on this forum are truely great and genuine!!!
i have received such encouragement and tips from debbie (From Staff Training), via an email, i would just like to convey my thanks once more for the special effort.

@ Dave A:- you wont believe how this forum is starting to impact on my thinking. thank you for your encouragement and tips too. I have noted in my diary to purchase the book (gonna have to scratch deep), but i trust that it will be worthwhile.

Because of the email Debbie sent i got the ball rolling even further last night.
My mindset changed and i actually got on the thinking side again, thinking positively. Problem solving was always one of my strong points, and i can't even recall in the last 2 months where i actually looked forward to and could not wait to get the books and start working toward this new idea.

I thank you all from the bottom of my heart!!! I have not expected such a response.

[Dave A]

Well done Debbie

... i trust that it will be worthwhile.

No investment in personal development is ever a total waste.

Every small business owner goes through rough patches. Mr. B, I look forward to the day when you're ready to pass on the flame based on your own experience of how you overcame your challenges.

[Pap_sak]

If you plan to save the bussiness you need to start looking at costs no matter how small. Banking, rates, staff and rent. Putting cash into your private account then transferring it over saves a fortune. What the rent like on your offices - could it be done from home and the garage? Is the driver being fully utilised or is it time to get a couple of small cash accounts going - even small shops like myself use couriers a couple a times a month. What you paying on insurance and could you save a bit by shopping about? Sit down with your staff and ask them if they have any ideas - they might have a better way of arranging routes.