Thanks for this reply bro. It has given me some stuff to think about that might stop be adopting bizarre and criminal measures to deal with the current extortionate fuel prices......but I don't think my client base will accept a price increase or care about my financial struggles.
It's a `cut throat` industry sector and pricing is highly competitive and there's always other services out there that will do the work cheaper. The only way I can keep going at the moment is to accept a huge drop in profits coz of the fuel prices and care more about my team and my customers than myself and my own family.
Happy To help man. It's amazing the ridiculous replies you've gotten. People are so quick to judge.
I'd recommend, of you haven't already. Calculate a few numbers:
- the price of fuel or the total monthly fuel expenses (assuming most other expenses are not so variable) which your personal income as the business owner becomes equal to or less than your expenses (potentially look for ways to cut personal expenses if you haven't already)
- if you have a rainy day fund, stocks, or savings, how long you can subsist on those (chances are your codt of living has changed since you last checked this, many people think they have a 6 month rainy say fund but really it's only 4).
- the price of fuel or total monthly expenses at which your business is no longer profitable and you risk going out of business without a cash infusion (and likely partial loss of ownership) or extreme luck.
Keep your eye on those numbers and have a plan for what you are going to do if ever each of those thresholds is crosses that way you have it planned out and don't have to scramble if it every does happen.
In a nutshell, if you're just taking a pay cut but you can still live, I say ride it out things will get better in the future. Or if the wife doesn't work then perhaps she could look at getting a job.
If you're really at risk of personal loss or losing the business, then one last ditch effort could be to try to cut each employees pay (including your own) by X%.
I remember during the crisis of 07 my grandpa took a 40% pay cut as an executive at his business while the company cut each workers pay by 10%. The business made it through and everyone got raises afterwards. Nobody lost their job. Maybe people had to cut back on a few luxuries or something, but the respect they gained from their employees was worth every penny of pay loss for those 2 years afterwards. Showing such dedication to their employees meant the world to everyone at that time.
You could do the same thing I mentioned above, a contract with your employees that says X% pay cut until monthly expenses go below $X for 2 months or whatever then it will creep back up. Let them all know that this is the only way the business wont go under and you won't lose your house. Hopefully they will understand and be reasonable. I know if I was an employee I would rather take a small pay cut than risk my freedom stealing gas.
Hell, even just telling maybe your most reasonable customers you need to increase prices by a measly 2% would at least help out here. The cost of them to try to find and go through legal contracts with a new company would likely outweigh the cost increase of staying with you. Just one last thought that came to mind.
Hopefully this was a little helpful!
Feel free to PM if you want since people are so judgy.. I'm happy to help I have plenty of experience with business finances (though I am not an accountant or anything, as you probably have seen I work in IT).
