Big Decision

crunchy62

Okay, let me spill it out.

My existing business is practically gone. If I stay at what I'm at, I will have
roughly €9,000 net income over the next seven months. I also have €7,000 saved.

I have about €30,000 worth of equipment and I work from a premises at home.

I am not in debt.

If I take on the project that will yield the €9000 over 7 months, I will have to hang on to the equipment and tie up the premises. I will be tied up working at the project 3 days each week.

If I cancel the project, I will be able to sell the equipment and free up the premises and hopefully find a new business.
However I will lose the €9000 and only have €7000 to live on.

This is a dilemma as I know my existing business won't improve and sooner or later I will have to find something else.

Do I bite the bullet and start now or do I stick at it for 7 months and try to get by.

All opinions welcome

miju

first and probably most important question is what is the depreciation of the value of the equipment over those 9 months.

The Corinthian

One piece of information is a little unclear, which is what are your running costs. You say that work from a premises at home (home office? Garage?), yet also mention how these premises are 'tied up', so this is a little confusing. Nonetheless, I'll presume your running costs are essentially zero, beyond what you may need for things like calls to your client etc. I'll ignore them for the time being.

Looking at the two options, one has you making €9,000 over seven months and the other has you making nothing. Unless you need those three days a week to find something new, or study or to change location, it makes sense on the surface to do the work.

A second factor is being free to taking something else while doing that contract. One way of doing this might be to sell the contract to a competitor if you do need to abandon it half way through, or take on a sub contractor to take on a day per week or fortnight, whom you could then pass the whole thing onto in the future as the need arises.

As you admit yourself it comes down to finding something else and whether you need to dedicate yourself 100% to finding it or can do so in a measured way over a longer period. Taking the plunge now may be a better course of action if you think that doing so part time will end up distracting you - on the other hand, if you've not fully decided what you want to do, then you may want to take the contract while you consider a broader plan (after all in seven months you'll be no worse off financially than now - indeed €2,000 better off).

Anyhow, that's just off the top of my head.

crunchy62

Thanks for the replies.

Just to clarify:

There may be potential for an additional €2000 income so that would be €11,000 before expenses.

I shouldn't have said "NET" in my first post

My main running costs are Insurance - €1600

Electricity - €200/mth

Phone - €120/mth

Business Licence fee - €1000

Advertising - €300/mth - €400/mth obviously would need to look at this as it's not generating any new business

Stationary - €300 over 7 mths

Maybe some maintenance - est. €300

Premises are a converted garage plus home office building

Equipment depreciation - €1000

Thanks

HellFireClub

crunchy62 wrote: »

Okay, let me spill it out.

My existing business is practically gone. If I stay at what I'm at, I will have
roughly €9,000 net income over the next seven months. I also have €7,000 saved.

I have about €30,000 worth of equipment and I work from a premises at home.

I am not in debt.

If I take on the project that will yield the €9000 over 7 months, I will have to hang on to the equipment and tie up the premises. I will be tied up working at the project 3 days each week.

If I cancel the project, I will be able to sell the equipment and free up the premises and hopefully find a new business.
However I will lose the €9000 and only have €7000 to live on.

This is a dilemma as I know my existing business won't improve and sooner or later I will have to find something else.

Do I bite the bullet and start now or do I stick at it for 7 months and try to get by.

All opinions welcome

It's hard to accept that, there are loads of things you could do to adjust that situation in your favour I reckon, but it's obviously impossible to comment without knowing generally what it is that you're at...

The Corinthian

Well, if you have separated those costs from your house costs, then that simplifies matters.

Presuming no advertising costs, as you're going to close down anyway, then your running costs will come to €6,440 according to your figures, meaning that you will make a grand total profit of €560 for seven months work - that's €6.15 per day before tax.

Close down the business now.

HellFireClub

crunchy62 wrote: »

Thanks for the replies.

Just to clarify:

There may be potential for an additional €2000 income so that would be €11,000 before expenses.

I shouldn't have said "NET" in my first post

My main running costs are Insurance - €1600

Electricity - €200/mth

Phone - €120/mth

Business Licence fee - €1000

Advertising - €300/mth - €400/mth obviously would need to look at this as it's not generating any new business

Stationary - €300 over 7 mths

Maybe some maintenance - est. €300

Premises are a converted garage plus home office building

Equipment depreciation - €1000

Thanks

What's the story there with that? If that outlay for advertising is not bringing in any new business, why is it there as an overhead? Why is it not generating any new business?

highlandseoghan

How long have you been spending €300 a month on advertising? Maybe you just need to change your marketing plan.

Its hard to give info without knowing about the line of work and info etc... Is there no way you can go out looking for new contracts \ business on the days your not working.

crunchy62

Sorry for being a little vague but to be honest I don't want competitors knowing my situation out of pride.

This business was successful for many years. However this service has now become widely available in state funded organisations so essentially I'm not needed anymore.
Many of the people who attend these organisations also receive funding. My business has died because anyone coming to me will not receive funding. Also as a private organisation, I have to charge much higher fees which people can no longer afford and will not pay.

What's the story there with that? If that outlay for advertising is not bringing in any new business, why is it there as an overhead? Why is it not generating any new business?

How long have you been spending €300 a month on advertising? Maybe you just need to change your marketing plan

Believe me I've flogged this one to death...that's why I've spent so much on advertising, just to give it one last shot.

"Well, if you have separated those costs from your house costs, then that simplifies matters.

Presuming no advertising costs, as you're going to close down anyway, then your running costs will come to €6,440 according to your figures, meaning that you will make a grand total profit of €560 for seven months work - that's €6.15 per day before tax."

Well it's really €9,000 - €11,000 less expenses. Plus some of these costs also include domestic costs as the same bill covers both.

I know this is getting a little confusing now.

Thanks again

lucky john

"My existing business is practically gone..."

"essentially I'm not needed anymore..."

"My business has died because..."

"Believe me I've flogged this one to death.."

"I know my existing business won't improve..."

I think YOU know the answer to your post already.

Screw pride, it won't make you a living.

It does't mean that this is the end, its just the start of a new chapter.
Your self employed (no one to make redundant) and no debt (no one chasing you for money) with savings and assets. Not a bad way to start again.

TsuDhoNimh

The way you speak about the business, as others have pointed out, suggests you've already made your decision. If that's the case, fair enough.

To play devils advocate for a moment, try thinking about a few relevant questions. You don't need to answer them publically on the thread, it's just something for you to think about personally to help ensure you're making the right decision for you.

crunchy62 wrote: »

However this service has now become widely available in state funded organisations so essentially I'm not needed anymore.

Having dealt with plenty of state funded or state run organisations, I'd suggest this is far from a black and white scenario.

In the vast majority of cases, be it in the private sector, semi state or state run, there is still room for alternatives and for further efficiencies and improvements in current offerings.

Sit for a few minutes (when in a suitably relaxed frame of mind, when not worrying about the financial side of things and with an open mind) and consider...

What are these organisations not doing right?
How can what they're currently doing be improved?
What can/do you offer that they don't/can't? (what's your USP or your value proposition)
Can you offer your services directly to those agencies for mutual benefit?
Can you alter your offer to be a complementary service rather than a competitive one?
If the need you used to fill is being provided, what area where you have existing expertise isn't currently being filled? (and is this a more viable alternative to some of the other business options you're considering)

crunchy62 wrote: »

My business has died because anyone coming to me will not receive funding. Also as a private organisation, I have to charge much higher fees which people can no longer afford and will not pay.

It's difficult to talk in relation to this without knowing the area you speak of.

In terms of the funding, in the vast majority of cases funding comes with serious restrictions and bureaucracy involved.

Is there any of your existing target market currently falling through the cracks in terms of eligibility for these schemes?
Is there any of your target market that aren't receiving the right type of help/assistance through these schemes, but which you could provide?

In terms of the base cost, I wouldn't consider that an 'end game' issue. The real question is can you provide a comparable (or even better a higher) value for money solution than the other providers?

Even if the base cost is far in excess, it's the value for money that matters to a business (convincing them of the value is another question, but you have to believe you can as a starting point before you could ever convince someone else that you can).

crunchy62

Thanks to all who replied.

Mods, can you please delete this thread for me as I no longer want the information to remain public
Tnx