So when do you admit defeat and throw in the towel ?

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So when do you admit defeat and throw in the towel ?

23 posts & 19 voices | Started 2 years ago by bigsi | Latest reply from NZCol

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bigsi - Member

Ok so I'm throwing this open to anyone who has previously or is currently self employed, or in true STW tradition anyone who has an opinion.

I've been a mortgage broker now for over 12 years and to be honest its all I've ever known. I've worked for the current company now for 10 of those years and 3 years ago went self employed running my own office within that company.

Things have been tough over the past 2 years with the recession etc etc but just recently things have taken a real dip (last 4 months). The mortgage market is getting better (very slowly) but most of this is people moving house rather than remortgaging (which accounted for 75-80% of our business until recently). We don't have any estate agents passing us business as they either all employ their own advisors, are not interested in recommending mortgage brokers or have existing relationships that they are happy with. So its proved impossible to attract new clients through that avenue.

The thing is that our office costs are as low as they can go and any money i can earn from business i write is just about covering these costs so I'm not currently able to draw any money to cover my home costs. My girlfriend works and is also studying for her AAT and so can't get a 2nd job. It would be difficult for me to get a 2nd job as i already work 6 days a week and need to be available to see clients in the evenings (although not many of these at the moment).

We are really struggling financially at the moment and have enough savings to plug the shortfall between income and expenditure for maybe another 2-3 months but thats it.

So. Is it time to throw in the towel and try to get a job as an employed advisor within a bank etc if i can or should i stick it out and keep plugging away ?

Any thoughts ?

P.S. I know there are people in a worse situation than me but I'm just after some feed back.

Posted 2 years ago #
Mostly Balanced - Member

I'd say it's time to change tack completely and look at a more honourable career while you've still got the savings buffer and I say this as someone who has spent time in the financial services industry myself.

Posted 2 years ago #
shooterman - Member

Realistically, is anything going to change in the next few months while your last financial reserves are running out? Would you be better using your savings to keep you afloat while you look for another job?

I dissolved a partnership about this time last year. I had some money to continue trading on my own but my judgement was that 2009 and 2010 are going to be awful years.

My view is leave yourself in a position to try again when things improve.

Posted 2 years ago #
b r - Member

Looking at buying, best rate at 5% for 2 years than 3% thereafter - somebody is taking the piss with the base-rate at 0.5%!

And that I guess is one reason why you're getting very little work, and is the other that a lot of banks are demanding direct-customers only - to increase their margins?

Posted 2 years ago #
jontawn - Member

Hmm, tough one - and have been previously, and am again in a similar situation.

2-3 months to allow for a career change is, imo, slim. While your current career path is driving you potty there is I am sure still some money to be made. If you could find an employed job to do what you do now there will be less stress, less financial hassle and generally a little easier, you should earn a little more than you're earning now so getting your savings up to 6+ months.... Or, when you've got an employed job, you can go to night-school/OU etc/something else to start you on your chosen career path.

Being skint for 3+ years (i.e paying other people more than I took as salary/expenses/etc with less skills, less ability and lots less hassle) gets a little boring after a while, and it took some time off and a little relaxation to realise that it may be difficult to make the decision, the benefits are much greater (am now cutting down on the happy tablets so I can stop taking them)

Hope you get your decision made and stuff turns around bud.

Jonathan

Posted 2 years ago #
lowey - Member

Get out now and maybe retrain. I don't know how old you are, but lets face facts. 2010 is only going to get worse once the election is out of the way.

Posted 2 years ago #
mcboo - Member

it's time to change tack completely and look at a more honourable career

Whats dishonorable about helping people find a mortgage exactly?

People havent been remortgaging because rates have been very low and inflation non existant. CPI skipped up this week for the first time in a good while. The bank I work for thinks rates will stay low all through 2010 but people are going to def start thinking about locking in a decent rate. ie good chance I think you might have seen the worst of it.

Posted 2 years ago #
Luminous - Member

2009 was an awful year for me, out of work for most of it, almost ended up homeless !.

Now though, I've managed to get a little work, doing what I did before.
But I am already looking to get into another industry for what will hopefully be a better future. (I'm an Engineer)

I'd agree with other posts and say that you might try something else.

When the savings ran out for me, the prospect of having to sell the roof over my head, was a very unpleasant reality to contemplate.

I would have thought that you could always come back to what you're doing right now, when/if the time is right.

But don't hang around, with only 2-3 months money in the bank, and with overheads possibly nibbling at this, I'd get out and do something else.

One mistake I made, (oh the benefits of hind-sight) was holding on too long, til the money ran out !.

Good Luck

L.

Posted 2 years ago #
fauxbyfour - Member

'Mostly Balanced' what's dishonorable about being a mortgage advisor?

Posted 2 years ago #
thepurist - Member

bigsi - I'm in a similar position, self employed with a business on its knees and wondering what the hell to do about it. I'm an ex consultancy/telecoms/software bod who jacked it all in to become a garden designer - like you, the recession has finally bit and the last few months have been deathly quiet.

It's hard to be objective when it's your own business, something you've built from scratch and really want to succeed. As a self employed person you don't have the finality of a P45 so you can just dribble on with whatever work you've got and keep the hope that 'tomorrow will be better'. I've been thinking about this over Xmas and realised that if I was looking at my company as a 3rd party the advice would be pretty clear cut, so I've set myself a reasonable target for the end of March and if I don't hit it then it's time to change tack. Until then I'm giving it my best shot to keep going, and also taking time to look around and see what I can do next.

Good luck with whatever you do - we're the forgotten ones who don't show up in those headline stats.

Posted 2 years ago #
Gary_M - Member

Just had a similar telephone conversation with a friend of mine. Worked with a bank since he left school, 21 years, was performance managed out the bank last year with a 0 month salary payout. Got a job in May with an IFA and he's not writing enough business so they've told him the salary stops and if he wants to stay then he'll need to go self employed. So basically he's not making anywhere enough to live on - nothing at all this month, and he's giving it six months. But he doesn't have a clue what to do then.

I was close to telling him it was time to give up and move on but it must be very hard for him when it's all he knows.

'try to get a job as an employed advisor within a bank' - you'll be lucky.

I understand what you must be going through and all I can say is good luck.

Posted 2 years ago #
Bunnyhop - Member

I'm in exactly the same position as you. Infact it's uncanny that you started to see a drop in business at exactly the same time as myself.

Have you thought about working from home, (which is what I do now) hopefully with little overheads?

It's hard to answer the question, as in this moment in time a crystal ball would be great!

If you're confident of getting other work and can adapt your skills or retrain, probably best to get out.

Good luck.

Gordon Brown did make me laugh (sarcasm mode) on the Andrew Marr show, when he said he was happy about the amount of new small businesses that are being created and are doing well, what he failed to acknowledge were the number of small viable businesses that were doing o.k and are finding themselves in real trouble after years of trading, unable to carry on through no fault of their own.

Posted 2 years ago #
squin - Member

Si,

I'm in the same game and although 2009 was really tough, I'm feeling optimistic about 2010. Am happy to talk offline with you regarding routes that I'm getting business through.

I went through a soul-searching period mid 2009 so know exactly where you are.

Don't leave the industry, I often read your advice on here and you are a decent broker. There will be a way to make what you currently have/do work. Do a search for 'Acres of Diamonds' on Google - it's all urban myth, but there's a lot of good pick-me-ups in the stuff if you ignore the bullsh1t.

Drop me a line regarding size of your client bank, network, protection panel, do you have a route to refer pensions, UCA's, Will Writing etc and I'll do all to help - put your mobile number on there if you want and I'll call you, it might not be until tomorrow or Friday though.

Like you, I always always give my clients the best advice - even if it means I don't get any business at that point in time, the rewards of honesty and integrity do come!

Stu.

Posted 2 years ago #
tonyg2003 - Member

Bigsi that sounds very tough. I've heard tales of the mortgage market drying up particularly remortgages. I guess than there are many people on SVR after their deals finish that can't afford to move or get a better deal.

However you may just have to consider that you whole business has changed and move on. I understand that the huge number of products that were available - one of the main reasons that you needed a broker - have reduced. Plus without the feed from your Estate Agents clients and - I'd guess - price comparison websites giving stiff competition, the business looks like its changed.

It seems like you are going to have to make a decision soon. I'd first try to move somewhere close in the financial sector where your skills might have some value. Retraining to another completely different business will mean re-training costs and it take you quite a while to get back to your previous earnings levels. However it seems like you have to make a decision ASAP.

Posted 2 years ago #
bigsi - Member

Cheers for the feedback and words of support guys.

It could just be because its a slow time of the year and having had a bad few months already seems like i can't see the woods for the trees.

squin I'll be in touch with you when i have 5 mins, strangely I've got to go out on an appointment to see a client in a minute.

Working from home is a possible but its a big step and will only save about £300pm. It takes away the shop front and makes you invisible to the general public unless you have lots of money to spend on advertising (which i don't). This in turn can make it even more difficult to pick up introducers such as estate agents

cheers again all, its given me something to think on

Posted 2 years ago #
therealhoops - Member

If you're splitting I'll have the shifters.

sorry, standard response to folk in times of financial crisery. It sounds like you're bored to me. If you're not already I'd start scanning the situ's vacant. It might take a while to get an interview and you can always say no. What does the missus think?

Posted 2 years ago #
Mostly Balanced - Member

Whats dishonorable about helping people find a mortgage exactly?

Please don't take it personally.
In my working lifetime I've seen maximum home loans rise from 3 times income to 5+ times income and the huge property price rises fueled by reckless lending. It somewhat agrieves me that it will be far far harder for my children to afford to buy a house than it was for me. That means more to me than the fact that the value of my own house has trebled in a relatively short space of time.
I've also found in my experience that the financial services industry pretty much relies on selling people products (finance/insurance) that are far in excess of their real needs.

Posted 2 years ago #
thisisnotaspoon - Member

from a career POV its better not to have gaps on you'r CV.

Going from self employed motagage advisor to one working for a bank would be much much easier I'd imagine than throwing in the towel and having 6months off. Working also keeps the mind sharp, no point taking a 6month sabatical to ride bikes, coming back to an interview and finding your not quite as on top of intrest rates and economic forecasts as you thought you were.

My mates are abroad making pittance, but having a good time. One is a challet bitch, the other does tours on busses arround europe mainly involving beer. Both have 1st class Process Engineering and Chemistry degrees which is about as employable as engineers get in these times!

Posted 2 years ago #
bigsi - Member

I've also found in my experience that the financial services industry pretty much relies on selling people products (finance/insurance) that are far in excess of their real needs.

Hmmmm perhaps thats where I'm going wrong

Hopefully it won't come to splitting the bikes but if it does then you have first refusal on the shifter "therealhoops".

The missus thinks i should be look at getting a 2nd job as she feels that I'm a good, honest broker (her colleagues words whom I've helped not her's).

Perhaps working from home where i don't have to keep office hours plus a 2nd job a few days a week might be the way forward

Posted 2 years ago #
jontawn - Member

peopleperhour.com ?! Good luck!

Posted 2 years ago #
Philby - Member

Working from home will save you over £3k a year, and you may be able to put additional expenses against tax e.g. bike mileage. This at least will buy you time to find a job, decide to continue self-employed or re-train for an alternative career.

While there are downsides to working from home it does mean that you can offer clients a more flexible service e.g. seeing potential clients in the evening rather than when the office is open during the day.

From what I have heard there is an expectation that interest rates may go up this year whih may create more business.

Good luck in whatever decision you make!

Posted 2 years ago #
dawson - Member

I do IT support for a network of IFA's - I know of some mortgage brokers who are doing some more qualifications so that they can do pension transfer and investment stuff rather than just mortgages and GI.

Posted 2 years ago #
NZCol - Member

Sorry to hear things are that bad. I guess my question is as a self-employed person why have you not built yourself a buffer to cope with situations like this ? Sorry, thats not majorly helpful but its the downside of being self employed. I've had 2 12 momth stints where I have paid myself basically zero to get comapnies off the ground. Today I am sitting on a 180K hole from late payment of invoices at the exact time I have to pay all my provisional tax, gst and acc levies. Thats business. On the other hand I have built a buffer when times are good to see me (and everyone else) through.
Personally I would stick it out if you think that you do a good job and want to make a success of it. Times like this are times where you can start to increase your business turnover by preying on all your colleagues who are in similar positions. Its a question of risk. If you are prepared to go into debt (to cover your expenses) while working your t1ts off to expand your business then hopefully you will reap the rewards. If you want a least risk approach then get a FT job and accept that you will be constrained by that. Not a pleasant place to be and I do express my sympathy as its a difficult thing to think ratioanlly about when you are slap bang in the middle of it. Fwiw both business I punted on worked out, first one I sold, second one we have 10 people and are slowly expanding and business has never been better but its been 5 years of hard work to get here including some big sacrifices (lets just say my bank manager loves me although a bit less now as I am not in debt !) Good luck with whatever choice you make.

Posted 2 years ago #

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