X-post from other thread on "How Entrepreneurship Wrecked my Finances" - Was asked to post in a new thread entrepreneur how earn by blogging blog

Original post here.

Please read the other thread first as a lot of the basic questions have already been discussed. I'm hoping someone can help me out. Thanks.

I'm in it right now. Had a very successful bike rental company in a seasonal tourist spot working out of a cheap and nasty industrial park. Rent was incredibly cheap and we just delivered the bikes to clients either to their hotel or rental house or the local bike path parking lot. Nobody needed to see we were running out of a rusty trash can.

Season one and two were profitable and growing (season two was 50% more gross sales) but soon clients found our location and started showing up at the industrial park. We rented some extra space there to create something at least presentable. This wasn't our business model but we just couldn't stop people from showing up.

During that season I'm finding that we can't grow fast enough to meet demand because we have no business credit so I take out a few loans from Kabbage and Blue Vine totaling $25k and basically just used the money to pay back the original loans just to build credit so we can get some term limits with bike manufacturers. Think like a $10k budget with net 90 day terms to pay it back. That's pretty much our whole season and would be all we need to start each year with a new fleet of bikes.

Season three is about to start and we get the boot from our industrial park due to overuse of the property. All those people showing up totally fucked us in the end. Now we scramble to find a new location and find an unbelievable spot right on main street between downtown and the beach. Every tourist will walk right by us every day but it's not big enough for all the bikes so we find an additional spot in another industrial park. Each spot costs double what we were paying at the rusty trash can.

Now just rent and utilities are quadruple what they were before and to compound it, another bike shop just opened up when there was none for the previous 5 years. We need money to open these new spots (first, last, and security to sign a lease) so we have to use those loans that were just sitting there. Now we have to hire more employees as well since we have two spots and with the competition, we don't see the increase in sales we were expecting based on the previous years sales.

The competition forced us to lower our prices and even though we have done roughly 20% more in sales than the previous year, our overhead has more than quadrupled. I used to just bail this place out of my pocket because expenses were not that much money and I knew I could get the money back next year but now I'm not so sure. We are currently flat broke and still trying to raise $500 that we need to pay rent tomorrow. My co-founder and myself and my wife did not get a paycheck last Friday but the other employees did. We are looking to liquidate assets to cover rent for the winter but I'm not sure it's going to work. I'm still in the hole roughly $12k for this season and don't see a light at the end of the tunnel.

This is not my day job but it is for my wife and brother in-law co-founder. We don't really need the money but other people in the family do. Feeling desperate and depressed at the moment and thinking I should just let it go. It's super fun and has a ton of potential but for me this season has just been extra stress with no profits to show for it. Not to mention my wife quit her job to run the shop on main street.

Any pointers?

submitted by /u/Uncle_Larry
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