Debt Problems

It’s been a busy few days. I left the Great Yorkshire Show on Friday morning and drove to Cirencester for the Cotswold Show, stopping at Nantwich on the way “past” to see the team and collect some more stock.

Over the past few weeks, I have shared some frank conversations with friends who are experiencing tough financial conditions. Their businesses are not making money and they are struggling to pay the bills. Money is getting tighter and tighter as they max their credit cards, and they are very fearful about the future.

I felt their pain deeply, having been through the same situation last year. We ran up debts of £100,000 as our show sales collapsed. Our show business almost overnight stopped making money, and we were left with a full calendar of events for 2018 with signed contracts that we couldn’t get out of. It was an incredibly stressful time and one that I feel fortunate to have survived.

Thankfully we are now back in a strong position making money and should be debt free again by the end of the year. I believe the reason we survived was that I had experienced a similar situation a decade before when my sandwich company went bust. The lessons I learnt through that failure gave me the mental strength to take the tough decisions that are required to save a business in crisis.

These lessons apply equally to personal finances as they do to business. So, if you are struggling with debts, you can’t pay or wondering how to pay your mortgage at the end of the month then read on. I have been there and know what it’s like to dread the phone ringing or the knock at the door knowing it could be a debt collector or the bailiffs.

A complete list of lessons and strategies I employed are too much for one blog post, but I would like to outline the most critical thing you can do to turn the situation around.

Stop digging and leave your pride and ego behind.

Let’s examine what each of these means in turn.

“Stop digging” means stop spending money on anything and everything that is not 100% essential. In my case that involved pulling out of more than 100 shows, laying staff off and paying for shows that we didn’t even trade. The risk of trading and losing more money at the event outweighed the long-term cost of paying for the stand.

“Leave your pride and ego behind” is one of the hardest things you will ever do. There is a massive stigma in our society regarding debt problems, and so we tend to hide it away. Keeping your debt problems a secret is a big mistake. The only way to move forward is to stop caring about what anybody else says or thinks and to make the tough decisions that are required.

Concentrate all your efforts on reducing your regular outgoings, examine every single expenditure and ask yourself if you need to spend this, maximise your income by working extra hours or a second job and then talk with the people you owe money too and agree on extended payment terms. Buy yourself time and finally don’t borrow more money to pay the old debts!

If you are staring down the barrel of a debt problem, I know how stressful and lonely it feels. I cannot fix the problem for you, but what I can tell you is that you can come through this situation. It will be hard. It will take time, and you will almost certainly have to give up many of the luxuries you have taken for granted in the past. But you can do it.

Share the problems with your family and friends, don’t keep secrets. Don’t keep spending to “keep up appearances”, this only makes your situation worse.

Face up to the problems. Draw a line in the sand and say to yourself that you are going to get through this. There is light at the end of the tunnel. Turn your face towards that light and walk towards it.

It has taken me twelve hard months to turn Valentte around and I believe that you can do the same for your situation. My thoughts and prayers are with you.

Remember, we climb the mountain, not in giant leaps but one small step at a time.

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