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EXECUTION I'm going to go from bankruptcy/£240,000 personal debt to a life of freedom using Facebook ads.

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Paul David

Paul David

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I've always thought that I could get through anything and that I was strong-willed and confident.

However I've really struggled mentally with the situation and level of debt I have. I've felt like a complete failure. I've let my Wife down, my children, my parents and also myself. I've had massive sleep issues and ended up on sleeping tablets. I see other Fathers at the school when I collect my children and think to myself I wish I was them. In fact, I was I just wasn't me.

I'm also not ashamed to admit I've contemplated suicide on numerous occasions. I think the fact that I didn't was because I couldn't do it to my children. It's a selfish thing to do. Not so long ago I even googled whether it was possible to kill yourself but then have the Doctor tell your family it was a heart attack or something. Madness.

I have a loving Wife and Children and just by them being them I'm beginning to get through this. It's not nice having companies chasing you for debts every week. I get a horrible feeling inside when I hear the post coming through the letterbox, is this another debt letter. I could file for bankruptcy but I need to ensure we don't lose our house. It's jointly owned and there's not a great deal of equity compared to my debts and luckily my wife has a good job.

I may still have to file for bankruptcy but I'm going to give it everything I've got to get out of this. The thought that after all the work I've done over the years to end up bankrupt upsets me. Especially for someone with my traits, I'm the one who was always saying I'm going to earn this or do that but to put things bluntly without my wife or help from my parents I'd be homeless and living on the streets now.

I have recognized however though that negative thoughts aren't going to get me anywhere. I've been reading self-help books to reinforce some positivity into my mindset and I've certainly gone past my F*ck You moment. No more negativity and punishing myself for the mistakes I've made in the past.

I can't change anything that I've done, there are some expensive lessons there but I can control where I end up the future and that's where I begin.

If anyone feels like they can offer any help or advice feel free. I'll try and update whenever something meaningful happens but for now, if anyone wants me I'll be mastering facebook ads and growing my brand and I hope that this helps people to NOT make the same mistakes as me.

"If you try chasing two rabbits you won't catch any." This is what I would tell my 20 year old self.
 
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Wow Paul. When I encouraged you to start a thread I didn't realise how much you had to get off your chest. That is a whole world of lessons we all should learn from. Thank you for sharing.

In many ways to air it like this must feel like you have drawn a line in the sand and crossed over. Yes there is some baggage you will need to take care of from your past life, however firmly fix your gaze on the future and use the pressure from the outstanding debts as fuel for progress.

No matter how hard the journey don't give up the fight. Your family needs you. Stay strong, stay focused.

I'll PM you.
 

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Paul, the main thing I would say is that it seems your only mistake seemed to be not building equity in the business before exploring new channels. Everyone has done it to some degree, so your situation is somewhat academic... the problem is that since the numbers are comparatively large, you're feeling overwhelmed. Stay strong, "they can't eat you".

The way I'd fix it is to center what you're doing around the building of equity, which would allow you to balance growth against a shareholding within the business. Your present situation happened because you borrowed unsecured money against non-existent assets - money which was used to buy products over-which you held no IP (equity).

What I would do is consider very deeply what you're doing to build real equity in your new brand. What products are you selling? Can you create traffic streams away from FB ads? Can you talk to companies about creating affiliated offers? What's the barrier to entry on manufacturing the products yourself?

If you're not careful, FB ads are going to be your new eBay/website/stores/FBA.

--

PS one thing you absolutely must look at is to somehow get your personal debt to offset your tax obligations. I'm not an accountant, but this is what Donald Trump did in 1995 -- using losses as a means to write-off tax can, in some jurisdictions, give you a tax-free buffer when you do start earning again.

In the UK, this is what a profit/loss account is for in a business. You carry over losses and that offsets corp tax moving forward. If your business is in the hole, would be worth seeing if an account can offset the debt as a loss.
 
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Paul David

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Ok, where do I start with this? This is long so i'll break it up into smaller more readable posts. Your time is valuable so I hope you can get something out of my story.

Yes you read it correctly, my name is Paul and at the time of writing this, I'm £240,000 in personal debt and on the verge of bankruptcy.

If my story prevents just one person from making the same mistakes I've done then this will be worth it. This will also help me document what I'm going to do to fix it.

I opened a computer repair shop in 2000 (aged 20), and at the time I used to buy and sell computers but didn't know how to repair them. So I taught myself. Business was good for the first few years but instead of thinking of ways to grow the company I decided at aged 22 to buy myself a brand new Mercedes (£34,000). I paid a £10,000 deposit and put the rest on finance. Mistake number 1. (Not the finance, buying the car!).

To be Continued.......
 

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Paul David

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My new company couldn't afford to keep up repayments on the loans and they got called in.

Fast forward to now and I've just sold my power adapter eBay brand and put everything I've got into a new e-commerce brand. I love everything about it. I love the niche, I love the products, I love designing them, I love the types of customers that buy them. I launched 7 weeks ago primarily driving traffic from Facebook ads which I had some knowledge of but didn't get off to the best of starts.

Until reading a post from @RazorCut yesterday I got some advice from @biophase I was about to make the same mistake again of looking for something else. I spent over a year getting my new brand to launch and had to get over a lot of hurdles and here I was again only 7 weeks thinking about something else. Only this time it would have to probably involve getting a job which terrifies the life out of me.

My sole aim is to grow my new brand, if I have to bring in income from somewhere else to grow it I will. And in order to do this I'm going to become as proficient as possible in facebook ads as this is the fastest way to grow my brand (I have a competitor who spends $80k a month on facebook ads) so i know the concept works.

If I have to take on Facebook ad clients once i've learned enough about ads that i can provide enough value then I will. I'd rather do that than trade my time being somewhere at a set place for a certain amount of time each day.

So my journey begins. I will touch on some of the mental torment i've gone through in the last year or so as I believe having a positive mindset makes a massive difference.
 
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I could file for bankruptcy but I need to ensure we don't lose our house. It's jointly owned and there's not a great deal of equity compared to my debts and luckily my wife has a good job.
Sometimes the bankruptcy could be the best way to start over. Consider the options you have and pick the one that makes the most sense for you. Try not to be too attached emotionally to the house, especially since like you said you don't have that much equity there. Talk to a lawyer about possible options.

If anyone feels like they can offer any help or advice feel free. I'll try and update whenever something meaningful happens but for now, if anyone wants me I'll be mastering facebook ads and growing my brand and I hope that this helps people to NOT make the same mistakes as me.
If you need any help while you're learning facebook ads, I'll be happy to help and jump on a call from time to time and answer your questions.
 

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Learn facebook ads and sell other people's products/services using FB ads. Or just help people run their fb ads for a fee.
I totally disagree with that advice. That is going backwards in my opinion. If you spend any time with people who run their own successful FB ad agency you know that they all want their own product. They have seen how much success they have created for their clients and want the same for themselves. In fact many are running other peoples products as well because they don't have their own.

Going down the route of affiliate marketing (other peoples products) is a retrograde step for anyone who has a viable product. Why share the profit and not have overall control when you don't have to?

Focusing on finding out what makes people want to buy YOUR product is extremely powerful and can be extremely rewarding both financially and intellectually, (you can gain a lot of insights from that knowledge that can propel your business forward at lightening speed).
 
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Paul David

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Anyway, I then came across a company in Scotland who had 5 computer repair shops (they were actually buying laptop adapters from me). So I drove 4 hours to Scotland to see what sort of set up they had. I drove back a couple of hours later and I had decided I wanted to have more repair shops. (Mistake 6).

I rebranded the whole repair company, new company name, new logo, refitted the shop, increased the repair prices etc. Can't even remember now how long the idea lasted for but one night after having to get out of bed again as the shop alarm was going off at 4 am I thought, imagine this with 3-4 shops. Nope, not for me.

To be Continued.......
 

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Negotiating the debts makes sense to me. I would calculate the number of the total debt repaid at around 2X your director fees. Or about 2-3x your house equity. Somewhere in that range seems like the right trade for avoiding bankruptcy.

But it’s not a fair trade at 10x your equity. Don’t overvalue your pride.

I know it must feel like you have no pride left but ego is a funny thing. It still drives you even at your lowest points. That shame you feel. That’s a feeling YOUR EGO CREATES TO TRY TO PROTECT YOU. Ego is such a huge impediment to progress.
 

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I've spoken to numerous people about my options. The three options I have are 1. file for bankruptcy (which is complicated somewhat by the fact I'm the Director of a company) and I'd have to step down. 2. Try and pay off the debts in full or 3. negotiate a settlement with the creditors.

At the moment I'm going down the option 3 route. I'm not going to lie it doesn't look great on paper. However, the one positive (if you can actually call it that)is that I have very little equity in my home so the creditors know what if I file for bankruptcy they won't get a penny back from any assets as I have.

I'm pretty confident that I could negotiate a settlement figure of around £8k-£10k with HSBC. The other main creditor which is a peer to peer lending group will be more difficult however I'm pretty sure if I make an offer of £20k-£30k or tell them I'm filing for bankruptcy they may (and should) accept. The lending company would go to the people who've loaned me the money and present the offer to them. If it was me and I had to take £20k-£30k or nothing I'd have to take the money.

So there are options to possibly get the debt down to £40K or something even though yes on paper the debt as it stands is significantly more than that.
In the UK you can file for an IVA. During an IVA:
- a third party company negotiates your debt with creditors
- a large chunk is usually written off by the creditors
- you can remain in control of a company

If you want to keep your company, an IVA may be the best solution. If you go for bankruptcy, you can't control a company (for so many years, can't remember how many)
 

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Hope it helps you getting it out there. I’m in a similar situation and had to write down all my mistakes a few days ago just so I could stop a negative thought cycle in my head. It seems a bit easier once you own it.

Similar story but not quite as much £ as you. Have a relatively good e-commerce business in a nice niche but over the past year or so I’ve spent a lot migrating the website with a developer I didn’t trust, it’s a flop so we’re cutting our losses and doing it in house. I bought a car from company money when we had no company money I stupidly started another company and spent a whole lot of money and company time building an app that we haven’t actually had time to launch yet even though it’s really good. And also spent time creating other websites and ideas.

A month ago I deleted almost all websites except our main profitable three. Stopped all side projects.

Hope you hit your goals and sort your situation out whilst avoiding bankruptcy. Keep going. Keep fighting. In a year or two when you have loads of money and freedom you’ll look back and wonder what you were worrying about.
 
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Paul David

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That is promising. Now what was the reason? Where did these customers come from? Better FB targeting? Are they responding after taking a week or two to make up their mind? Are your Ads more on point? Is this a move towards profitability or just a blip?

Lots of questions to consider.
They've come from Facebook ads yes. The targeting is getting better now and I've managed to get some more audiences with higher purchase intent. Re-targeting and Lookalike audiences. I've spoken to a few people who are very experienced with Facebook ads and they told me that 2-3 years it was easier to become profitable from the gate but now it can take 2-3 months. My target is 5 product sales a day at £20 CPA minimum. This will bring in around £2500 a month.

One guy who has a sunglasses website told me that when he started his company in 2015 he knew a bit about Facebook ads but has become proficient by basically just running ads for his brand. He runs lots of A/B testing. His website now does about £6m sales a year and he gets paid to talk about Facebook ads. After his last seminar, he was approached by 7 companies to run their ads for them.
 

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I see a couple of patterns that you are probably already aware of. Just my two cents so take it for what it's worth.

1. You're jumping into businesses based on what you see others doing. Essentially copying them. They appear profitable on the outside, but I would venture to say that they are in the same boat as you. I would even go as far as betting that by the time you jump into the market, it is already saturated. I think Facebook marketing will be much the same VERY soon. I can't even watch a YouTube video without seeing an annoying ad with fake gurus telling you how you can make 10,000 per day working 15 minutes per week selling Facebook ads. Everyone and their brother is jumping into this market which will, in my opinion, cause a race to the bottom.

2. It appears you are selling commodity items. My dad had a very large company growing up that marketed produce. He had 400+ employees, 3 packing sheds, a ton of B2B customers in multiple countries, and huge operating costs. There were some months where he would spends $250,000 just in phone bills from his 25+ sales guys (the days of long-distance phone bills charged by the minute). Some years it was very profitable, some years it wasn't. The problem was, and is, produce is a commodity. There isn't much that separates one tomato from another. They are 100% market-driven. When supply is down, prices go up, you make money. Vice versa, when supply is up, prices are down, you lose money. One brand that has somewhat overcome this obstacle here in the stated is Wonderful Brands. They have clever marketing and patented varieties that make them stand out amongst a sea of fruits and veggies in the produce section. They've figured out how to effectively brand and make a commodity feel more exclusive and valuable. Whatever you endeavor to do, be different, be bold.

I would encourage you to read Blue Ocean Strategy (or the synopsis because it is pretty lengthy and I'm not a particularly fast reader).
 

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Paul David

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Fast forward 18 months and my Mercedes wasn't suitable for carrying computers and laptops so I sold it at an £18,000 loss and bought an old van. When I was younger I always had the mindset that I was going to be rich, financially. I'd see big houses and think I'll have one of them one day. I never doubted my ability to become rich.

I've also always wanted more. When someone would say be grateful for you what you've got I'd think but yes there are people who've got a lot more than me. I'm not happy until I get that. This attitude can be a good thing but for me, it's been the biggest reason why I'm now in so much debt. After 5-6 years I decided I didn't want to be stuck in a shop fixing computers all day and came across people selling laptop chargers on eBay. I was hooked. So I started selling laptop chargers on eBay alongside running my shop.

From an early stage in my business, I was kindly offered an overdraft from HSBC bank to fund my growth. Instead of using any profits from my business to grow I spent that on my own personal things and used the bank's money instead.(mistake number 2).

To be Continued.......
 
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Paul David

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A few years later I was offered the opportunity to purchase a website that enabled people to put the specification of their laptop on and it would generate a price for me to purchase to re-sell on. This cost £6000. Funded by overdraft. (Mistake 4)

So now I was running a computer repair business (with staff), selling power adapters on eBay, and trying to grow 2 websites at once. (Mistake 5). It seems so ridiculous even writing this.

To be Continued.......
 
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Appreciate the story!

For your new company, did you validate the product well before hand?

You failed sure, but you learned a lot too. And your tenacity is admirable. Just keep going, eventually you'll make it. Cut the 'I wish I wasn't me' thoughts out of your head. They will undo you. You took risks because you know eventually a risk you take will pay off far greater than whatever slowlaners are doing.

The money you owe the bank is not something to feel guilty about. They're a major bank. The money they lent you didn't exist before you borrowed it. It costs them nothing.

The peer to peer lending is harder sure, but they're making money too and I wouldn't feel bad either. Pay it minimally while you work on the new business!
 
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Paul David

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So the last couple of days the anxiety I had about my current debt situation has now been replaced with anxiety over running out of money in the next couple of months, as my e-commerce brand is still not profitable.

I'm 39 with a mortgage, two young children and Christmas on the way. Although my wife earns relatively good money I need to be earning money. I also need to keep my e-commerce going for however long it takes to become self-sufficient.

Therefore I've decided to re-list my power adapter database on eBay and Amazon but sell the adapters for a higher price than I did before. Any orders I will then drop-ship from one of my old competitors. If I can get 15-20 sales a day at even £2 profit it's around £1000 a month which is currently all I'm drawing from my company now anyway. Plus it will take around 1 hour a day maximum to run. Worst case scenario they don't sell because of the price, I have the option to drop the price and purchase some adapters from my old supplier and pack them from my garage. (Not ideal because it violates my rule of being able to work from anywhere anytime but I'm willing to do this short term)

I have also joined some facebook groups who specifically help with getting clients for running facebook ads for them. The aim is in the next 2 months is to get 1-3 clients paying a minimum £1000 a month retainer. The benefits of this are two-fold, one I will be able to bring in extra money and two I will be spending more time increasing my knowledge of Facebook ads.

Part of me thinks I am going back to my old ways of trying to spin too many plates at once but this time the difference is that the eBay and Amazon store is a means to an end. Simply to just keet some money coming in. Running Facebook ads for other people will increase my knowledge, have the added benefit of bringing in money and also help me reach my main overall goal of a successful e-commerce store.

The thought of helping entrepreneurs grow their businesses using Facebook ads excites and scares me at the same time. The scary part is whether I can actually produce the results. I have lots of help with this though on the Facebook groups.

On a positive note, my website got 4 orders yesterday with 5 products sold in total. That's the highest number of orders I've got so far. Onwards and upwards.
 

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On a positive note, my website got 4 orders yesterday with 5 products sold in total. That's the highest number of orders I've got so far. Onwards and upwards.
That is promising. Now what was the reason? Where did these customers come from? Better FB targeting? Are they responding after taking a week or two to make up their mind? Are your Ads more on point? Is this a move towards profitability or just a blip?

Lots of questions to consider.
 
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Paul David

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Eventually, I ended up with a £50k bank overdraft that I had personally guaranteed.

I had a couple of websites I used to purchase new and used laptops from for my customers and loved the idea of running a similar site. So I purchased a domain called whichlaptop.co.uk and for the next 3 years alongside running the computer repair shop and selling power adapters on eBay, I tried to grow the laptop brand. The issue was that the larger stores like PC World and Best Buy were selling new laptops cheaper than I could buy them from the distributors. They were loss leaders to these companies and they made a profit on the after-sales. I must have sunk £100,000 into trying to grown the domain over the years not to mention the time invested. At worse I thought I had a good domain name which is of value. (Mistake 3)

To be Continued.......
 
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The best you can do is learn from those misstakes and keep going. I must say i made a simar misstake with FBA but luckey for me i only invested 4000€ of my own money in French presses. iv still got most of them at home (anyone want one? :happy: ) but lucky ive never know debt.
 
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Paul David

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Sounds like a solid amount of failure lessons. Looking forward to hearing updates. Question. Have you spoken to a bankruptcy attorney yet?
I've spoken to numerous people about my options. The three options I have are 1. file for bankruptcy (which is complicated somewhat by the fact I'm the Director of a company) and I'd have to step down. 2. Try and pay off the debts in full or 3. negotiate a settlement with the creditors.

At the moment I'm going down the option 3 route. I'm not going to lie it doesn't look great on paper. However, the one positive (if you can actually call it that)is that I have very little equity in my home so the creditors know what if I file for bankruptcy they won't get a penny back from any assets as I have.

I'm pretty confident that I could negotiate a settlement figure of around £8k-£10k with HSBC. The other main creditor which is a peer to peer lending group will be more difficult however I'm pretty sure if I make an offer of £20k-£30k or tell them I'm filing for bankruptcy they may (and should) accept. The lending company would go to the people who've loaned me the money and present the offer to them. If it was me and I had to take £20k-£30k or nothing I'd have to take the money.

So there are options to possibly get the debt down to £40K or something even though yes on paper the debt as it stands is significantly more than that.
 

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Yes the pattern is clear.

My product is off different design and I’ve also added a matching accessory included in price.

I know the exact cost my competitor is paying for their products as I have spoken to their actual factory in China. They couldn’t provide me with the specifications I needed as they had exclusivity agreement with my competitor so I use a different factory.

I’ve been researching this market and products for the past year.
I'm not sure you're seeing the pattern mate.

You're selling the same thing, over and over and over and over and over and over and over again.


Let me start selling batteries because of XYZ reason.... fail.

Well, let me start another business selling batteries because of ABC reason.... fail.

Perhaps if I start another business selling batteries and I rebrand it .... fail.

Maybe if I start another battery accessory business and I import it from vietnam instead of China for BBC reason.... fail.

I don't think you're seeing the pattern. Get the hell out of that niche/industry. NOW.

The competition is fierce, those with resources have already consolidated the market through mergers and acquisitions. Then there are a few people that have managed to carve a nice little niche out of the market. But by and large, the marketer is already catered to. We don't need another battery reseller.

You've got no competitive advantage. Even with your branding... why would anyone buy from your little brand when they can buy from an established brand that has thousands of reviews and a lower price point?!

--------------------------------

Stop buying products and getting into costly new ventures. Learn facebook ads and sell other people's products/services using FB ads. Or just help people run their fb ads for a fee.
 

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They launched 3 years ago now so unless they're playing a really long game using VC money they must be making a profit if spending $80k a month on Facebook ads.
Facebook ads could be losing money and just a customer acquisition tool. Do they sell other things? Sell on other channels?

You just never know.
 
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Paul David

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Good point but I would guess @Paul has already made a purchase from them and gleaned all he could from their funnel process and followups. If not he's missing vital information and I think he's too smart for that despite previous indiscretions.

Paul, how are you estimating their monthly FB spend?
Yes I made a purchase from them last year. I know all about their email sequence and follow ups.

Regarding the ad spend. I met someone on a Facebook ads group who actually works for Facebook. He offered to take a look at my account whilst in work.

A few days later when we’re discussing it and my competitor he made an off the cuff remark saying “you need to be spending more than $80k a month to catch up to those guys”. He wouldn’t elaborate any further.
 
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Paul David

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UPDATE:

A lot has changed since my last post so it's time for an update. Firstly i managed to get through to Christmas by getting a few new clients for Facebook ads.

I haven't had the funds to do anything with the e-commerce brand so i'm actively looking to sell it at the moment without much luck.

On December 30th 2019 and after 20 years of being in business for myself I finally ran out of money. No money in my personal account and no money in my business account. Time to get my ducks in a row and prepare for bankruptcy.

After speaking to another parent at my Children's school, I decided to register for training to become a taxi driver. This other parent has been doing it since he lost his job 3 years ago. He works only days, like 6am - 12pm and earns around £130-150 per day. I can work it around my children and also my business work. So i applied and have the one week course starting on the 27th January.

By making that decision i've felt a great weight lifted off my shoulders. I no longer worry about having to get a "full time" job and I know that i can at any time in future earn money as and when i want to. Don't get me wrong this isn't something i see myself doing long term, but it's a backup plan and means i can provide for my family.

My Father has also set up a new company and i will be an employee, it's a facebook ads agency. I cannot be a Director of a company for at least 12 months after i file for bankruptcy so this is the way forward for now.

The company isn't a Facebooks ads agency like most set up. I have developed a unique offering for clients in a particular niche. Most agencies contact clients and offer to ads for them for a monthly retainer. This is the model i was using last year and i did get a couple of clients this way. However in order to be different i have set up a model that essentialy means i can control the niche myself. I won't go into detail here but I'm very excited after testing it on a small scale at the moment.

By the end of the year i expect to have filed for banktruptcy at some point and grown the new company to at least £20k a month in profit. And have my taxi licence as a back up so that i can fall back on that if all else fails.

I decided on January 1st 2020 that whatever has happened before cannot be changed. It was time to forgive myself and move forward, no more anxiety, no more negative thinking. New habits, new mindset, new me.

Last week i was preparing to ask my Father if he would put £5k into the new business account. Firstly to set up a few things required and also to be able to pay myself a low wage just until we get more clients or I start my taxi work. I'm down as an employee so even if i did have money i couldn't put it in because it's my Fathers business, it has to come from him or sales. Like i said I had zero money in any bank. You can't really get lower than £0 money in any bank and £240,000 debts so i focused on the fact that the only way is up.

I got an email last Thursday from one of my old competitors from when I used to sell power adapters on ebay. He asked me would i be interested in selling him my old database of adapter models. I was going to say sure £500 but then i thought i've got nothing to lose here so i told him i wanted £5k. He replied 1 hour later saying yes that's a fair price and within 12 hours the money was in deposited into my Fathers new business account. I actually cried with happiness. No need to ask him to invest now to get started and it gives me some breathing space financially for the next few months. Positive thinking at it's best!

I will post some further updates as I go along but this year is going to be the complete opposite of the last, i'm so excited now as to the ride that awaits.
 
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Paul David

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I eventually did nothing with whichlaptop.co.uk website or the website for buying laptops for people and let the domain expire. I run the computer repair shop until 2016 alongside my eBay business and by that time I'd had enough of the repair shop. Profits were down as people hardly had laptops or desktops anymore and I didn't even like being in the shop. I tended to work from home mostly and let my staff member run it. I made a decision (after some help from @Vigilante ) and closed it and now focused entirely on eBay business.

I couldn't become rich selling power adapters only on eBay so I started a website selling batteries alongside (mistake 7). I'd seen another company doing really well and thought yes I like that idea. This, unfortunately, was around the time a couple of planes went down due to lithium-ion batteries exploding. So my courier in the UK, Royal Mail, refused to carry them anymore. There was also that many different models of batteries that it ended up being a dropshipping model so I pulled the plug after 12-18 months.

To be Continued.......
 
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Paul David

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Next idea was Amazon FBA and i was still running my power adapter eBay business at the time.

I bought a course for for Amazon FBA for £4000 and started to look for things to sell. Initially I struggled with the notion of selling random things as I'd always wanted to build something big that meant something. So it took me a while to find a niche I could add value to. I found a couple of products to sell and did OK but nothing exciting. I then came across a power adapter seller in US doing really well. And herein lies the £150,000 mistake.

To be Continued.......
 
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Paul David

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I had some power adapters that were selling well with Amazon FBA, so I decided to borrow more money (I was still heavily into my HSBC overdraft) from a peer to peer lending group to buy more power adapters and sell them in Europe via Amazon and USA. Over the course of 18 months, I stupidly borrowed £50,000 then another £100,000. Personally guaranteed by me. (Mistake 8) And I must also state at the time that I was advised not to on here.

I created 30-50 FBA listings per Amazon country and shipped power adapters direct from China to Amazon. Some sold but the majority didn't. It cost me a lot of money eventually to get them out of Amazon and back to me in the UK. I eventually sold them at a huge loss. My eBay and Amazon store had 3 employees at the time (one of which was my Brother) and I had to let them go. Eventually, I put my company into liquidation and set up a new company to buy the remaining power adapter stock at cost with the profits from ongoing sales. However now I was personally liable for the debts I'd guaranteed. £50k from HSBC and £143k outstanding from peer to peer lender. My plan was to pay it back with the profits from my new company. (Mistake 9).

To be Continued.......
 
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MHP368

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Sounds like a solid amount of failure lessons. Looking forward to hearing updates. Question. Have you spoken to a bankruptcy attorney yet?
 
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Paul David

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Paul, the main thing I would say is that it seems your only mistake seemed to be not building equity in the business before exploring new channels. Everyone has done it to some degree, so your situation is somewhat academic... the problem is that since the numbers are comparatively large, you're feeling overwhelmed. Stay strong, "they can't eat you".

The way I'd fix it is to center what you're doing around the building of equity, which would allow you to balance growth against a shareholding within the business. Your present situation happened because you borrowed unsecured money against non-existent assets - money which was used to buy products over-which you held no IP (equity).

What I would do is consider very deeply what you're doing to build real equity in your new brand. What products are you selling? Can you create traffic streams away from FB ads? Can you talk to companies about creating affiliated offers? What's the barrier to entry on manufacturing the products yourself?

If you're not careful, FB ads are going to be your new eBay/website/stores/FBA.

--

PS one thing you absolutely must look at is to somehow get your personal debt to offset your tax obligations. I'm not an accountant, but this is what Donald Trump did in 1995 -- using losses as a means to write-off tax can, in some jurisdictions, give you a tax-free buffer when you do start earning again.

In the UK, this is what a profit/loss account is for in a business. You carry over losses and that offsets corp tax moving forward. If your business is in the hole, would be worth seeing if an account can offset the debt as a loss.
Thanks for your advice. Completely understand where you're coming from regarding Facebook ads becoming the new ebay or Amazon store with no control. I'm actively trying to build assets for the brand, email lists, facebook fans (although not worth much financially), instagram followers, facebook messenger followers.

Regarding the offset of tax, the debts were passed down from my previous Limited company which has now gone into liquidation so I don't think I can benefit using the new company. I will speak to my accountant about this and thank you for the suggestion.
 

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