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From making 1k/day to 10k in debt

TRFastlane

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Hey guys,

my current situation is that i am 10k in debt and have to pay some bills in a week from now. Going through all the choices, i am thinking to get a loan of 20k. What do you guys think of it? Would like to hear insights from other people here.

I made my first footsteps last year on November where i started an "Amazon Business" and sold stuff on amazon. I had one product (because of my small capital) and after a month or so, i was already making 1k/day from this product with 50% profit margins.

I was very happy because it was my first real business and so much money for me. It was a huge milestone for me.

Until March of this year hit and the sales went down slowly, but progressively as more and more competitors arised.

Now i am here, on August, making 50/day with 50% margins. I am 10k in debt and have to pay 2k bills in the next 7 days.

Now i know that i have and will make my own decisions, but it never hurts to ask someone for advice and opinion:

What do you guys think of a loan? i was thinking of getting 20k, reinvest 10k in my current idea and plan/project and use the other 10k to pay the credit itself until my project makes some money (btw it will be an online-shop, but this time on my own platform)

I really need a solution because i am stuck in this situation.

Thank you.
 
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IGP

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What kind of loan? A loan at 0% interest from a friend or family member I hope?

Borrowing more money to pay money you already owe is a slippery slope. Someone is most likely getting stuck with a bag of shit!

I would reach out to your creditors, explain your situation and ask for a 30-60 days grace period.

Then I would take your existing product, figure out how to make it better than your competitors that are competing on price and start selling ASAP.

Live on Ramen Noodles or rice and water until you get enough money to pay your bills.
 

JokerCrazyBeatz

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What kind of loan? A loan at 0% interest from a friend or family member I hope?

Borrowing more money to pay money you already owe is a slippery slope. Someone is most likely getting stuck with a bag of shit!

I would reach out to your creditors, explain your situation and ask for a 30-60 days grace period.

Then I would take your existing product, figure out how to make it better than your competitors that are competing on price and start selling ASAP.

Live on Ramen Noodles or rice and water until you get enough money to pay your bills.
^^ This

Cut your current expenses down to the most minimal levels (if u havent already)

DO NOT TAKE OUT A LOAN . I know right now it seems like a savior but you never use debt to pay debt

Improve your product , improve the value , and/or learn to market or advertise in a more efficient way maybe through different outlets

And the final most important piece of it all is YOU WILL ADAPT

As humans we always are fearful for the worse things that can happen not remembering that in times of trouble we ALWAYS adapt

If you loose everything and go to zero will that be the end ? NO you will adapt and build again

The most wonderful thing about loosing is you learn to build again and build better
 

Scot

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Is the debt on you or your business? Do you have a lot of inventory, you may be able to liquidate it if you have a significant amount. But agreed, do not take a loan.
 
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Yoda

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Loan for loan rarely makes sense unless you're creating a scenario where the interest rate is going down, or the owner of the debt makes a difference.

It might seem like you can 'amortize' the payment longer, but an increase in debt (and potentially interest) creates a future set of handcuffs. Very high risk move.
 

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you never use debt to pay debt

Not always.

If you have (example) $20k worth of 19.99% credit card debt and you can open a 6% credit line and kill the CC balance then it totally makes sense. Interest payments would go from like $330 to $100. Put the extra $230 saved against the principal and pay it off quicker and save money.

Don't let conventional banking wisdom hold you back. Follow the numbers. The numbers don't lie. If you can "pay off" (or more accurately, transfer) a high interest debt to a lower interest debt - do that. Absolutely.

Now, taking out double what you need to invest in a business is more of a judgement call and a risk but that's really a question of how confident and risk tolerant you are regarding your new venture. Are you okay doubling your debt if your venture fails? Because that's the real question being asked I'd think.
 

ZCP

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You cannot borrow your way out of debt.

Only profit can repay debt.

If you can guarantee (not just hope for) profit, then sometimes a loan buys you time (sometimes at a large cost of profit) to get that profit.

An example, you are 12 feet from oil. There are no known obstacles to drilling the last 12 feet. Just a matter of a few days. It is guaranteed that when you hit the oil, you make a lot of money. Would you take out a small loan to keep from losing the entire company?

Your company is losing money. Competitors have moved in. You do not see an easy way out. You could roll the dice on an idea that may or may not work out and does not have a definite timetable even if it does. Would you take out a loan to keep going?
 
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InformationH

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Where did all your profits go in the first place? Did you use the money to pay off debt? Re-invest in your business? Or spend it on desires?

Is there another way to get the 10k? Sell whatever you don't need. Pick up another job. Ask a family member. Hustle as hard as you can.

You want money to re-invest in this same product which went 1k/day to 50/day? Are you changing something about it to beat the competition?
 

JasonR

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I thought this ad was a bit ironic...

My first thought is get a job so you have an income source to pay your bills. Pour the rest of your time, money and focus into your "fastlane" pursuit (business, RE, whatever it is).

It's really REALLY hard to scale and grow a business without access to money. If it wasn't for the original job i had, I would have never been able to quit in the first place.

First rule of business: start with some income or capital

Second rule of business: Keep at least 6 months of living expenses in the bank

Third Rule: Profit

Good luck.
 
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MitchC

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Out of interest how is 10k going to take a $50 a day product back to 1k a day?

If you have a bunch of stock is it something you could hustle and sell locally to businesses or on Facebook buy and sell pages and Craigslist?

A job is a good idea, just reframe it so that you are telling yourself every $ I earn is being invested at 20%, or whatever the interest rate of the debt is.
 

The-J

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Get on the phone and negotiate down your payments. You'd be surprised at how forgiving loan officers and credit card companies can be.

If you owe it to the government, then you can get on a payment plan that will allow you to pay less.

10k ain't shit, and it certainly won't kill you. It's also not worth going bankrupt over, for a company or for an individual. Bankruptcy ain't cheap.

Do NOT take out a loan to pay it unless you're able to get better credit terms.

As far as going from $1k a day to $50/day, I do hope you learned your lesson now. You got lazy and complacent. You didn't put forth the effort when you were supposed to. As soon as you see sales decline, that's when you grind, and you didn't.

You're going to survive this, and it's not gonna be that bad.
 

TRFastlane

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Where did all your profits go in the first place? Did you use the money to pay off debt? Re-invest in your business? Or spend it on desires?

Is there another way to get the 10k? Sell whatever you don't need. Pick up another job. Ask a family member. Hustle as hard as you can.

You want money to re-invest in this same product which went 1k/day to 50/day? Are you changing something about it to beat the competition?


1. I spend most of the money for mastering facebook marketing. I bought a course and put everything into practice and built the barebones for my store.

2. I am thinking about asking friends, but unfortunately i am coming from a poor background. My parents don´t have money that they can give me either.

3. No. Definitely not. I will launch new and better products. Not only one as i did in amazon. I don´t want to put everything into one basket. I also want to build my e-mail list.

But the problem is the money as i stated. It hurts me because my mom gave me her last 100€s that she had on her side to pay one bill that i had to today.
 
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eTox

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You don't explain the situation to us thoroughly. Take the time to outline who you owe to, what you can do to either lower or defer the payments. What do you want us to suggest you? I am 10k in debt too, so what?

Please think out loud first. Tell us what your options would be to solve this problem:

1.

2.

3.

And explain why you think that option will work. Let's figure this out together. It's not like they are going to kill you and rape your mother. Relax. Let's get this solved, your problems are our problems because we all learn from them.

:)
 

TRFastlane

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You don't explain the situation to us thoroughly. Take the time to outline who you owe to, what you can do to either lower or defer the payments. What do you want us to suggest you? I am 10k in debt too, so what?

Please think out loud first. Tell us what your options would be to solve this problem:

1.

2.

3.

And explain why you think that option will work. Let's figure this out together. It's not like they are going to kill you and rape your mother. Relax. Let's get this solved, your problems are our problems because we all learn from them.

:)


Appreciate your help so far guys.

Thank god, most of the debt i owe is my friends and family. Now some of them need their money in one month (couple of friends)

The real issue for now is that i have expenses (just the business expenses!) approximately 1400€ per month.

A friend of mine offered me a job as a regional manager for a security company that he wants to build in Germany.

Basically that would be a good chance if it works out because i would get 5k-10k per month, depending on how big and fast i can build my team (10k with 50 employees). He built his team in 2 months of 50 employees.

Thats the job side of things.

I am just thinking that that would take time too and i really want to start taking action and work on my real business too. So i need money
 
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Mineralogic

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You cannot borrow your way out of debt.

Only profit can repay debt.

If you can guarantee (not just hope for) profit, then sometimes a loan buys you time (sometimes at a large cost of profit) to get that profit.

An example, you are 12 feet from oil. There are no known obstacles to drilling the last 12 feet. Just a matter of a few days. It is guaranteed that when you hit the oil, you make a lot of money. Would you take out a small loan to keep from losing the entire company?

Your company is losing money. Competitors have moved in. You do not see an easy way out. You could roll the dice on an idea that may or may not work out and does not have a definite timetable even if it does. Would you take out a loan to keep going?

it works for US government and large US multinationals who trade on public markets !
 

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The real issue for now is that i have expenses (just the business expenses!) approximately 1400€ per month.

Shut down your business. You can only run a business like that when you have reserves of cash and the knowledge it should pay off.
You definitely don't have the first and I don't think you have the second.
You had all summer to make the business profitable again and its still bleeding cash.
Borrow more and soon you will owe 20k.

Your debts are you debts. Not your mums, not your friends and not your families.
Sell what you can, get a job and start paying back the people you borrowed from.
You can play business when its your money and your risk.

[HASHTAG]#toughlove[/HASHTAG]
 

Sanj Modha

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Wow that's a sad story.

If I was in your shoes I'd get rid of everything that's unnecessary. That includes subscriptions, games consoles, memberships etc.

What's your background? Can you sell products or services to plug your finances and remove that debt?
 
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TRFastlane

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Wow that's a sad story.

If I was in your shoes I'd get rid of everything that's unnecessary. That includes subscriptions, games consoles, memberships etc.

What's your background? Can you sell products or services to plug your finances and remove that debt?

I already did that. It´s just business expenses that would be around 600-700 from the next month on.

As I mentionend above i have a job offer as a manager of a security company.

Basically, i have to find around 50 employees who are ready to work which i think is totally doable. The CEO (a friend of mine) said he did it in 2 months.
 

STswiss

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I already did that. It´s just business expenses that would be around 600-700 from the next month on.

As I mentionend above i have a job offer as a manager of a security company.

Basically, i have to find around 50 employees who are ready to work which i think is totally doable. The CEO (a friend of mine) said he did it in 2 months.
Take the job, pay the money back.
Learn and master how to find, qualify and hire the right people for this security business.
Create an online platform where people will apply for such a job and take a commission on each hiring arrangement for security companies.
...
 

Sanj Modha

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I already did that. It´s just business expenses that would be around 600-700 from the next month on.

As I mentionend above i have a job offer as a manager of a security company.

Basically, i have to find around 50 employees who are ready to work which i think is totally doable. The CEO (a friend of mine) said he did it in 2 months.

Take the job and pay off the debts then start again. You'll be in a better position and with more life experience.
 
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TheNextTrump

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I already did that. It´s just business expenses that would be around 600-700 from the next month on.

Might be the wrong "business" to keep dumping money into...

Basically, i have to find around 50 employees who are ready to work which i think is totally doable. The CEO (a friend of mine) said he did it in 2 months

This scares me, sounds a lot like myself about 5 years back.

And if that's the case here, all I have to say is you should have listened.

---Hiring 50 people for any sort of a job isn't "totally doable". Assuming there would be a decently in-depth hiring process for a security company, that would be a mountain to climb all of its own.

___________________

Your asking all the questions, but then seem to have all the answers.

If you have access to a job for $5-$10k a month, then you better cut out all the other BS that your spending time on and dive in yesterday.

What's stopping you here? Or did you start the job already?



 

TRFastlane

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Might be the wrong "business" to keep dumping money into...



This scares me, sounds a lot like myself about 5 years back.

And if that's the case here, all I have to say is you should have listened.

---Hiring 50 people for any sort of a job isn't "totally doable". Assuming there would be a decently in-depth hiring process for a security company, that would be a mountain to climb all of its own.

___________________

Your asking all the questions, but then seem to have all the answers.

If you have access to a job for $5-$10k a month, then you better cut out all the other BS that your spending time on and dive in yesterday.

What's stopping you here? Or did you start the job already?

Thanks for your answer. I am already sorting out the details with my friend who is located in Berlin, Germany (east side of Germany). He is already established there and want to expand to the west side where i come to play.

Waiting for him to give me an OK and we can start. So all i do for now is waiting for a couple of days.


What methods and ways are the best and fastest to hire quality employees? Any good sources to learn from?

I don´t wanna waste time and use the time in between. I think it´s a matter of days till we start.
 

TheNextTrump

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What methods and ways are the best and fastest to hire quality employees? Any good sources to learn from?

https://berlin.craigslist.de/search/rrr?lang=en&cc=gb

That's where I would start. (Assuming that's the right location, when I got to the page it was in a different language lol)

__________________________

Now I don't wanna act like I know it all, because I don't. But I do have a little experience here.

Showed up to work one day and my boss at the time said "we need 30 people hired in 60 days, can you do it?"

Needless to say I got to work.

________________________

I first reached out to my personal network, family friends etc. O luck

Then dug into the "resume" section on craigslist. Hired a few

Then started running adds on craigslist. Hundreds of apps flew in, couldn't keep up.

We reached our goal within 35 days, but it was a grind my man.

Most people were slobs that either didn't want to work or were criminals. Your gonna get that with craigslist, but if your willing to grind it out youll find some winners.

___________________

Good luck, and hope everything works out.
 
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FrankFKA

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Why did you keep your 50% margin if competitors started showing up?
The rule with Amazon selling and anything in general is to adapt. If you don't shift your prices OR beat your competitors by adding some sort of value, then you'll get crushed.
Did you lose the buy box?

The problem with going on an independent platform is that you'll need LOTS of money to get it started - people know Amazon, they don't know your store. It's going to take you a lot to get it going.

Also evaluate your market. Many products are competed to absolute crap and they're no longer profitable - what are you selling?

Get a job. Don't get a loan. Your friend's proposal sounds like an interesting opportunity for you. It would be good for you to build up some capital and reevaluate your position
 

Tony I

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What did you spend all of your money on?


this. 1K a day to asking your mom for $100?? Even with competitors, you should have money saved?

OR, you should have a ton of shit you can sell.
 
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