My lord what you don't know about business can kill you.

[Flabbergasted]

I've taken it upon myself to learn every lesson about business the hard way. If you have never run a business you should really try it if you want to go insane......

Step 1: Buy a "hole in the wall" cafe in the crappy part of town off the main street. Mind you this was the "scary area" of Portland (shootings and drugs).

Step 2: Pour all your energy and resources into the effort of remodeling the front half of the building (on the main street) to make the business viable. It took four years before we could get a chance to apply for a loan, during which time we averaged an income of $3,000 a year. We also had a child.

Step 3: After reopening the business hire someone to manage the restaurant who causes you thousands in debt.

(2 years later....)

Step 4: Price a daily catering order too low. This increased our cash flow in the short term which helped immensely, but we failed to account for the incresed income, into the range of having to pay income taxes at the end of the year off a profit of $35,000. The only problem is we didn't profit more than $17,000 but we cannot deduct the business expenses for our loan payments ($18,000). So not only did we go farther into debt, we now owe the IRS nine grand which we don't have a penny of. We will have to go back into debt as well incur interests charges from the IRS and Bank.

Just sharing. I think its funny.

[Straight Shooter]

My Lord. Have you found yourself a good accountant yet?

I had my trials and tribulations of being self-employed and running a business and nothing came together until I found a good, honest accountant to sit down with me and go over the nuts and bolts of various scenarios.

I left that business behind, I'm still self-employed, though, and still rely on my accountant for any questions which have financial repercussions.

Terribly sorry about your problems. The IRS was a thorn in my side for 15 years. I can relate.

[Flabbergasted]

8. Actually I'm real close to going off on that subject. I'd think that he should have been

aware of our tax situation. This was unprecedented profit (not) for us.

Anyway we are going to have to find a new accountant.

It definitely could be worse.

[Straight Shooter]

10. Yes, he definitely should have been aware, if he was looking at all your records.

Start looking now for an accountant, but of course you know that all the good ones are busy because it's tax season.

I had a hack accountant, too, very slick but absolutely useless in the smarts department, steered me in the wrong direction. I caught on just in time, put all my records together neatly in a big box, made an appointment with an accountant locally and laid everything on the line to him.

Five years down the road and he's still my accountant. I don't make any business financial decisions without getting a quick review from him. It costs money, but it sure saves time and expense down the road.

Best of luck in getting somebody new. H&R Block, people joke about them being a tax return mill, but that might be a good place to start, just so the IRS knows you're making a good faith effort. And do keep the IRS informed with brief summaries of your progress if you think they're about to put the heat on you.

[Flabbergasted]

14. I think I'll avoid the Jiffy Lube of accounting but thanks for the info. nt

[TomInTib]

1. Seems as tho you and I went to the same school (or not)

My problem(s) just involve a couple of more zeros.

The IRS is killing me.

Big bubble.... Big pop!

[tabasco]

4. "My problem(s) just involve a couple of more zeros."

We're impressed.

BFD.

[Flabbergasted]

6. He's a friend. And Tom has earned it. nt

[TomInTib]

13. What I meant by that..

Is that I am fucked, too.

Flabbergasted is a friend of mine and we have shared our woes via phone over time.

He can get out of hiss jam.

I, however, cannot.

[Flabbergasted]

15. Perhaps I could write "Fuck Me" on your carry on.....nt

[TomInTib]

24. Seems as tho someone wrote "Fuck Me" on my life.

You are going to make it, buddy, because your aim is true.

I, on the other hand, am getting pretty much what I had coming to me.

[wryter2000]

2. Oh my gosh

Open a restaurant? You might as well sign up for American Idol.

Of course, I'm trying to supplement my day job by writing fiction, so what the hell do I know?

A friend in the winery business once said to me, "The way to make a small fortune making wine is to start with a large fortune."

[Flabbergasted]

3. Most of the small business you can open in this country are not viable.

Works well for big business. The IRS is illegal.

[EvolveOrConvolve]

7. There are LOTS of viable small business opportunities

I run a small business, and while it's a grind doing all the work myself, it's very satisfying not having some asshole for a boss. I employee about 10 people right now, and it's a very cool feeling to be able to hire folks who need work, and pay them well for their work.

Unfortunately, there are lots of good business people (numbers-wise) who don't know marketing. That was the hardest thing for me to learn. Someone can have a great idea, a great product, and be the smartest bookkeeper in the world, and their business will fail if they can't market. Marketing is almost an artform.

[Flabbergasted]

9. My statement still stands.

[EvolveOrConvolve]

11. I don't think it necessarily fits, though

Businesses don't fail - business owners fail.

Granted there are some businesses that fail more than others - restaurants is one of them - but I don't think a majority of small businesses are not viable.

[Flabbergasted]

12. So it's the cobblers fault when his business becomes obsolete?

[EvolveOrConvolve]

17. No

but it is the cobbler's fault that he didn't see the trends and start diversifying his business. Modern day business owners have to be flexible. Inflexible business owners have a good chance that their businesses suffer when the prevailing winds change and they're unprepared.

edit: it sounds like you were able to sense the need for diversification, therefore the catering. It sounds like you are doing okay, considering the circumstances. The thing about business is to keep plugging away.

[Flabbergasted]

19. So you think grandpa who was in the family business for 4 generations should

be able to keep up on what modern business theory is.

Point being: I think you are applying an extremely simple statement to an extremely difficult issue.

[EvolveOrConvolve]

20. Absolutely

Business owners need to learn about business, especially modern business. Long gone are the days when you could put out a sign on main street and do okay. It is very very complex to deal with a global customer base.

[Flabbergasted]

22. My statement still stands. nt

[EvolveOrConvolve]

26. How?

Most of the small business opportunities are viable. I don't know how you can say that most of them are not. Almost all small businesses are viable with the correct owner.

[Flabbergasted]

27. Lets say thats true but lets also admit that what you're really looking at is

finding a needle in a haystack. Its also quite easy for you to use cliches when your business is solvent. You may be less eager to lay blame when (or if) your business slides because of something beyond your control.

[EvolveOrConvolve]

32. Sure, but all businesses have things happen that are beyond control

My first business failed. Plain and simple, I couldn't do it. My second and third businesses are thriving because of the mistakes that I made on the one that failed. There were a lot of things that came up - customers not paying their bills; customers going bankrupt; I had a hard time getting new clients because of the economy at the time; etc. But, had I planned appropriately, I could have and would have been successful. It was entirely my fault that the business didn't work.

I'm not saying that every business that fails is because of poor management by ownership, but a large percentage are for that reason.

To ask a blunt question: why did you open a restaurant in a bad area of the city? I ask because one of the mistakes I made with my first business (an automotive services firm) was to locate in an area away from car dealerships, who were my largest clients. I saved a little money on my lease, but had thousands of dollars a month in extra payroll expenses because of the added trip time between my business and my clients.

Your attitude that "most small businesses are not viable" is wrong. Possible you are influenced by your own experiences and that is clouding your judgement?

[Flabbergasted]

34. I had nothing to lose. I was handed an oppurtunity. It is not something I could have done

on my own. I had $1500 I had saved up. The guy said I could have it for that much so what the hell.

Anyway perhaps I deserve the judgements you're handing me. I always knew I was foolish, naive, and ignorant to try something that almost always fails. People loved to tell me that 90% of restaurants fail in the first year. It made me work harder. Maybe I should have quit but I have no regrets.

I concede this argument.

Take Care.

[EvolveOrConvolve]

35. I do think you were naive

but not foolish. I wasn't trying to win the argument, just make you see that things are never impossible. The business isn't lost until it's lost.

A restaurant for $1,500 is a steal. Remember that anything is still possible. Request an extension from the IRS (I do this every year). That gives you 3 months to save the business. You still have a lot of time left before the whole thing comes crashing down.

Keep your head up.

[itsmesgd]

5. I love that I have no overhead, else I would not be able to work for myself

Good luck with your future endeavors

[Jonathan50]

16. Spend a year or two working for someone else in the same field

If you can work up to manager, you'll have at least a somewhat decent idea of the pitfalls involved in that particular business.

Being an employee gets you a paycheck while you experience mounts.

The thing about business is that so much of what you have to do is counterintuitive.

[Flabbergasted]

18. So you think a manager has a clue about being a business owner?

I met a few that thought they had a clue!

[Jonathan50]

23. Certainly you won't know everything there is to know.

But you will have a leg up on someone going in completely cold.

It helps not to have to make *every* mistake on your own dime.

I've been in and out of my own businesses for about thirty five years now.

[Flabbergasted]

28. You do have a point but you're hitting a sore spot. Take Care. nt

[Bronyraurus]

21. God bless ya, Flab

That's the American Dream!

[Greyhound]

25. Recently lost my latest business.

First failure, following the two successes, and learned so much more from this than the previous. It's good to read that you seem to be taking this setback well, most, in my experience, don't.

Good luck to us all.

[Flabbergasted]

29. Not a whole hell of alot I can do. I'm afraid if things don't change drastically by

the time we file we'll have to sell. We really have no more energy to fight. That's life. It could be way worse. My mail man is Ethiopian. When he grew up they went hungry. Now that's stress.

[EvolveOrConvolve]

33. How are you marketing your business?

It sounds like even a small influx of cash could help you save the business.

[Flabbergasted]

36. I've never had a problem with marketing. I can get people in with my eyes closed.

I have issues with selecting the right people to work for me and I'm horrible with understanding financial shit. My wife and I are bleeding heart softies also.

I'm great at marketing. I can piss people off still get them back through the door.

We are paying 18 grand in loan payments none of which is deductible. We didn't know that. We'll face that every year. So what the hell am I going to do. I was ignorant. I can renegotiate the loan payments but its still a crap solution. More of a band-aid.

[EvolveOrConvolve]

37. A business professor gave me some advice

He said that if you have revenue of $100,000 per year with a profit margin of 5%, there are two ways to double your net income. 1) Double your sales to $200,000; or 2) Lower your expenses by 5%. "Cash Is King" is what he always stressed.

It's almost always easier to lower expenses. If you have to extend your loan out over a longer period of time, it helps your present cash flow situation. Also, talk to an accountant and see about ways to get the loan into an instrument that can be written off (if possible).

I think in your position, you should also try to increase sales. Some suggestions:

1) You say you're a good marketer - that's the basis of a successful businessman. Go out and market yourself to other businesses. Take, say, a 10 mile radius and go door to door selling your product. Sell lunch items that you deliver for free. I have a guy who calls me 2 or 3 times a week and brings sandwiches, soups, and salads to me and my staff. I spend probably $100 a week on his food. It's not fine dining, but you can't beat the convenience. If you could get 10 or 12 customers like this, your cash flow position would improve immediately. Make sure that you have a minimum purchase amount to get the free delivery. My guy's is $25 per trip. If it's less than that (which is rare) he charges me a $10 delivery fee.

Do the same thing downtown. I don't know how far you are from DT, but I used to live in Portland, and there is a lot of money in the offices down there. You could do catered dinner meetings, lunch deliveries, specialty snacks (cookies, muffins, etc.) that you deliver once a week, etc. A lot of businesses are willing to pay for convenience. I know because I do it myself.

2) Go to government buildings (make sure that they allow soliciting first!) and offer to make their lunch. Especially in rainy towns like Portland, people like to stay in for lunch sometimes. Get a contact name from the places you go so that you can make follow up calls. If you are familiar with the office and the people in it, you are more likely to get that business. (Note: even offices that don't allow soliciting are fair game if you can come across as "not a salesman". Be a down-to-earth and charming person, and you're in.

3) Spend time in areas with lots of office buildings passing out your card. The card should mention that you make and deliver delicious hot or cold lunch meals to busy workers. Make sure that the card has a "call to action" statement on it. Give out enough cards and you'll get some business.

4) Look for fairs/conventions/etc. that allow vendors to come in and sell food. Give out your card to EVERYONE you see. If you have the money, get fridge magnets printed with your business information (and a good "call to action" statement) and give those out. Fridge magnets are good ways to get in front on a constant audience. People like to use fridge magnets to stick up family pictures, their kid's school work or art, and wedding invitations. How many times a day does the fridge get opened in most houses? That's a lot of face time for very little money.

5) Look for community organizations in your area of town, and pitch them on having their meetings at your restaurant. If you can, donate money to non-profits in your immediate area. If you are in a not-so-good area of town, make sure that those organizations are active in the community. (Boys & Girls Club, YMCA, etc.). Get to know the people at the organizations, especially board members. One board meeting with 15 people at $25/person per week is $375 in cash flow.

I really am sorry to hear about your predicament, but I think you still have time to save the business.

[Flabbergasted]

38. Fortunately there are vastly simpler ways to market a restaurant.

The problem is I'm tired. I've had one weekend vacation in the last 18 months, once again poor planning and whatever, but we're ready to call it quits.

Thanks for the help

Best of luck.

[Nabia2004]

30. Talk to the IRS, you may be able to work out a deal

A friend of mine in similar circumstance was able to get his taxes cut to a 1/3rd.

[Flabbergasted]

31. Well thats cool. I guess it can't hurt. Thanks. nt