Evening everyone my little bike shop has come to a point were I don’t think I carry on anymore after being part time evenings and weekends for four years I opened it full time a year and a half ago and it’s got to the point I’m not gonna get through another winter and also made the mistake of taking out a large loan last November to help get it right on track I have failed to get enough people through the doors. So what I do now as I know I can’t make it I’m looking for a full time job and keeping the shop open to cover all fronts at mo rents paid up for next month I’m payed up with suppliers (aka I’m not a dick like that) but need advice on the debt I’ve gain from the loan and my over draft? I’m sole trading rather than ltd.

So help what do I do now?

I’m living with parents and don’t want them to get lumbered any advice tips hints directions I need to be looking?

Or full time jobs in the Lowestoft area?

sorry, can’t help but you have my sympathy for what that’s worth

Not been in your position so I can’t offer constructive advice but know that “you” haven’t failed.

Sad to hear that. I think its a true-ism that its your 2nd or 3rd business startup which is a success.

Debt and loan are in your name I imagine as you are a sole trader, so they remain your personal liability even after the shop has gone. In contrast the whole point of a limited company is that such debts belong to the company.

Best of luck

Cheers guys first attempt at working for myself more worried about what my mum and dad living at home than anything else everything I’ve read says it’s only me that should worry the house and stuff is safe but and all my problems are in my name not theirs but those TV shows on debt have me more than worried. I’ve I can find a full time job earning £1200 a month after tax I’ll be able to muddle through but just can’t find anything.

Assuming your parents didn’t guarantee the loan (which I’m sure you would have mentioned were it the case) the bank has no claim against them or their assets, including their home. The fact you live with them is irrelevant.

If you get to the point you know you will default speak to the bank at the earliest possible opportunity and ask to discuss a debt repayment plan. Don’t fall for those ads about making yourself insolvent.

Jamba – In contrast the whole point of a limited company is that such debts belong to the company.

its great in theory but the unfortunate reality of very small retail businesses is that often the loan is either still a personal loan that the director then invests in the company, or is secured with a personal guarantee.

You need some proper financial advice. Do you have an accountant?
It sounds like you are acting at the right time – before the fan has really been hit.
Is there any prospect of (1) Selling the business as a going concern (even if that just means most/all of the debt gets covered? (2) Liquidating the stock to cover the debt? (3) Do you know why it is failing and what you’d do to fix it if you had the time / money?

I think it’s the age old customer service still doesn’t beat the Internet sale price I was offering spares, repairs and wheel builds only to keep the shop small (cheap) I’m listing stock cheap on eBay and off loading my own bikes to get as much as I can. I’m going to get an appointment at the CAB tomorrow and see what I have to do next as I just have no idea and have the biggest knot in my stomach and feel sick purely worry about things I have no control over. I can probably last about 2 more months plus what ever comes in I between while I’m searching for a full time job but Lowestoft is very lacking in work and it’s worse since the offshore industry took a plunge south.

It sounds like you are acting at the right time – before the fan has really been hit.

And if it does hit the fan, it’s not really that much of a biggie in the wider scheme of things.
Be positive, there might be a way of salvaging things.

If all your stock is yours time to do an add up. How close to the debt is the inventory you have?
If this is it and it’s paid for you could get the lot onto ebay for to good to be true prices and generate as much cash as you can to reduce the debt.

sorry to hear this

“(3) Do you know why it is failing and what you’d do to fix it if you had the time / money?”

I know its late to the party but i looked at doing this early last year. To the point of business plans and looking for premises.

Then the oil price tanked.

I believe this is more the cause for the lack of footfall/repairs than anything else in an area where offshore is a key employer. Non essentials are cut – and like it or not for most people bikes are a luxury.

Hence i opted not to commit(living in aberdeen)

just to add that wasnt a hind sight post – it was a “bad luck bad timing” theres little you can do about that.

Sorry, I have no advice to give but fair play for giving it a go and it’s a shame it’s not worked out. All the best for the future.

Speak to Stepchange, they are a debt management charity and don’t take fees, they would be able to give you some advice,

https://m.stepchange.org

Assets:
You have some stock and can fix bikes.

Opportunity:
People need bikes fixing.

Buy a cheap van (very cheap) and then offer mobile bike fixing.

This will use up the stock you have bought and make use of your skills.
It will be mobile both in terms of where you go to chase customers and in terms of time.
You could work in the day to cover bills, fix bikes out of hours so customers get them collected by you in the morning / evening – fixed and returned the next morning / evening.

You can work it round a full time job. The van also doubles as your transport so sell your car if you have one.

If the rent is paid for the next month, you have a month to get sorted.

While the shop is still open, can you try other avenues? For instance, how near to the station are you? Do people commute to it by bike? Could you open 7am and offer a one-day turnaround to commuters?

I’m just thinking what shops near me are doing to survive; like you say, the traditional bike shop has is being hammered by those online.

Lifes tough in business, money is the biggest head ache. Worry solves nothing its your actions that will get you through whatever the outcome. Get advice from someone not involved (as mentioned above) should be your first action also having a mate who will listen to your worries will help relieve some of the pressure, don’t bottle it up. Talking stuff through can help you see things differently. Be up front with your parents, its important and will help.
Trying to get yourself a business going is not easy and it does not always work, its not failure you tried. How many yack on about I’m going to do this or do that but never try, thats failure.

Sorry I cannot offer more advice but others have covered what you should do above, all the very best to you.

I offer an out of hours service at no extra charge and work 10-6 mon-Thurs and 10-9pm Friday and Saturdays and 10-7pm Sundays at mo but I’m to far from train station for commuters which and in a small town.

I’ve an appointment this morning at 11am at the bank to see if they can help and also been in one agency this morning and have appointment at the other at 1pm so fingers crossed I can find a full time job ASAP and carry on the shop evenings and weekends as the shop is so cheap £100 a month plus bills which are never much. It’s just a case of advertising every new customer I get raves about me on Facebook but advertising is so expensive and it’s the cash I just don’t have lol.

Like others, I can’t offer practical advice, save to say it is always better to regret what you have done, not what you didn’t do. I hope it works out for you.

And as pointed out, provided your parents are not guarantors of any debt, they are in the clear and I am sure will be happy to continue supporting you.

Well done, sometimes it is just bad luck.

Sorry to hear of your situation. Been there, gone bankrupt, nearly lost everything, but there’s always a way out.

Firstly the loans – are they unsecured, or are there any guarantors? If they are unsecured, when you meet the bank DO NOT let them change the status of them! And don’t sign anything while you are there, take their advice and think on it.

I’m listing stock cheap on eBay

and here by the looks of it.

Good on you for actually trying the business, and more importantly realising that it isn’t working before things get too bad.

This guy is near me, and although I don’t know him personally, it would appear he is doing ok. He appears to have developed a network of customers via Facebook, Strava (hes obviously quite handy on a bike!). Many people I know have independently spoken about his shop, so he must be doing something right.

I’ve an appointment this morning at 11am at the bank to see if they can help

Careful they do not try and sell you in to more debt.

DO NOT let them change the status of them! And don’t sign anything while you are there, take their advice and think on it.

Very very good advice !

I was almost there a few times in my early years, I know exactly what that knot in the stomach feels like. Very, very bad luck.

But look at the basics – you’ve got a roof over your head, you’re presumably not going to be out on the streets. Unless your parents are guarantors, there’s no way the bank can go after them. Banks are generally sensible – they want their money back, but they know that going too hard after someone with limited assets is pointless – and it sounds like you’re doing the sensible thing and talking to them early. As others have said, don’t let them turn an unsecured loan into a secured one (even if you had something to secure it against).

For the stock etc, eBay is a good idea, but also maybe try your suppliers – they might be willing to take current stock back. Or try the bike trade forums – many shops would I’m sure be happy to take it off you. Depends what you’ve got and how quickly you need rid of it of course.

Keeping it going in the evenings and weekends sounds a good idea if you can manage that workload – don’t buy advertising, it’s a waste of money. Do leaflets, wee signs on lamp posts and bike racks, see if you can get recommendations from other local shops, things like that.

You have premises? How long is left on the lease? If it’s more than a few months, try talking to the landlord to see if you can get out of the lease early – there may well be a fee, but less than the rent you’d pay.

My lbs does bike maintenance evenings – really basis stuff but they’re hugely popular and are a great opportunity to sell some kit and showcase the shop’s other services. Lots of women cycle too – call your local WI etc and offer to give a repairs demo or a talk on MTBs. Local press are desperate for stories and good photo ops – borrow a cat, stick a yellow jersey on him, call him Froomie and ring your local paper to tell them about your shop’s cycling cat. Hope you can turn things around.

Buy a cheap van (very cheap) and then offer mobile bike fixing.

not the worst idea. My employer (a uni) actually pays these two guys to bring their van once a week and service people’s bikes (at no cost to staff). It’s basically changing inner tubes and brake blocks on people’s BSOs but the public sector is desperate to get more people commuting by bike / hit sustainability targets / etc – I’d bet some councils and stuff would be up for it too, if you can find their Sustainability Officer or whatever… 🙂

It sounds like you’re not a million miles away from making your business sustainable, if not massively profitable. How much extra profit per month would you need to be able to get by, and to take the pressure off?

Good luck OP, whatever happens you’ve done more that most would ever do and it will set you up for future ventures.

I have a friend (yes its not me) who was in this situation nearly 2 years ago (different business type too) and buried his head in the sand, and is trying to trade out of it.

Worst mistake ever!!! I have warned him and tried to let him know its a mistake, but he thinks it can work…. trouble is the lies and deceit that goes with it.

He was renting a nice house and appeared to be doing well for himself….. couple years in and its not working and hes racked up some fairly large debt….. fast forward 2 years and hes given up the rented house, moved back home and racked up even more debt with no real way of paying it back…. He is still trying his business and its hardly bringing in the money (sometimes as much as little as £1 profit per day, bearing in mind he has no overheads now) yet he won’t give up and try for a part time or even full time job

Well done for realising earlier and wanting to fix it as soon as you can, things can escalate and spiral out of control very quickly

There is a mobile bike mechanic round our way who works out of the back of a tiny little van – from what I can gather he’s always busy.

Leaflets/flyers around bike racks/bike parks might work, however I think bike maintenance evenings/courses are one of the better suggestions…

Can’t really offer any extra advice that is not above. As others have said that debt is yours not your parents, hopefully it’s not too much and hopefully you can find a FT job so you can pay it off. Talking to CAB and good debt advisors early is a good idea.

If it’s any consolation the cycle trade is very very hard at the moment, you are not the only one in the same situation and I can feel both sympathy and empathy with your situation. Try not to let the sickening feeling get to you, it’s only money and will get paid back eventually.

If you go mobile, try to get out for rides with as many local groups and clubs as you can. Great way to build up contacts and word of mouth.

Just avoid doing loads of work on rides for free!

Just a thought, but how about getting some flyers put up in places that do the cycle to worK to scheme. Advertise to service their bikes (local council offices/plod/hospital/large factory’s)

The other liability you may have is your lease. If it’s a fixed term, you’re liable for the rent until the end of the term, unless you’ve the option of giving early notice.

If so, the sooner the shop is re-let, the less your liability. You are probably also responsible for restoring the good condition of the shop and redecoration before handover.

Your landlord won’t want the expense and trouble of removing a non-paying tenant, so even with a fixed term you may be able to negotiate an early departure – which should be covered by an agreement to say that there are no further outstanding liabilities when you hand it over.

Once you’ve done that, you can estimate how much debt you’ll be left with – add everything up with conservative estimates for any unrealised assets. If you’re working when you speak to the bank, you may be in a stronger position to reschedule your loans – you don’t want to be paying 20+% overdraft rates.

Good luck.

Of course there is the fact that currently 3 bike shops within a mile or so of each other probably doesn’t help.

Which one is yours? Can you fire bomb the others? 😛

Edit: Make that 4

If it’s any consolation the cycle trade is very very hard at the moment,

Why do you think that is? Too many shops opened? Is that location orientated, or the whole of the UK?

If it’s any consolation the cycle trade is very very hard at the moment,

Why do you think that is? Too many shops opened? Is that location orientated, or the whole of the UK?

The Internet.

Brexit hasn’t exactly helped….

https://www.theguardian.com/commentisfree/2016/jul/27/brexit-economy-shock-uk-negative-interest-rates

The Internet.

I thought internet sales was part of the bike industry, just like any every product sold in the UK?

Well I have some very good news now I’m back from the bank they have opened a basic account for me transferred everything I have too it and frozen all debt and interest for six months to give me a chance to find a full time job and turn around the shop all because I was honest and upfront they have told me my parents house and assets are perfectly safe and would not go near that I have to say a very big massively huge thank you to Lloyds for this. I’m having the rest of the day off to work on my CV and also been offered an offshore contract doing early morning barge moves for a few mornings a week so all going well I could be sorted.

Once I have a full time job I’m going to have the shop back to the old way of evenings and weekends but it’s all looking up from here.

Thanks everyone for your support and I can’t believe the knot has gone at last I’ve been feeling so ill for weeks now.

And if you need hand built wheels remember

Handcraftedwheels.co.uk on Facebook

That sounds like the best outcome you could have hoped for – nice work and good luck for the future..

Great stuff.