The "tough" advice: After looking at your posts, I've gleaned a few things, and enough to make an assessment to advise on: 1) Take out a Home Equity Line of Credit on your residence now, for perhaps the $70K. See what your bank will give you as a credit limit, based on the income you've claimed over the last few years. This HELOC is NOT for the business, it is for YOUR living expenses for a while. 2) Stop taking "your salary", and use it to pay down the CCs: it sounds like you've taken too much money out of the business, and/or run personal expenses through the business. It sounds like you've learned your lesson, so enough about that, now to move forward. 3) Make sure your bookkeeper/accountant prepares a good budget, AND STICK TO IT! You have to become a businessperson now, so manage the finances of the business. Cashflow is everything. You MUST pay bills in the following order: 1) employees (not you though!) 2) taxes-payroll, FICA, sales, etc 3) Suppliers of inventory & goods 4) Utilities 5) Lease/Real Estate 6) Misc. vendors and support services 7) Business debt 8) YOU GET PAID LAST! Review your operating budget and sales forecasts, and calculate how much you can squeeze out to repay this debt each month. Make sure there is a number you know you can commit to. This is the number to pay or work out with the CC companies. Look over every penny spent, and look for ways to reduce expenses, most businesses can cut 10%-15% in expenses and never notice it. If an expense is not going into a product that you sell at a higher margin, or relates to selling the product, cut it. Try cutting an expense and see what happens, if no one "screams", or you do not lose sales, keep going. This can add up quickly for debt paydown. Then, you need to work your tail off to beat the sales numbers, if you start bringing in extra business, a good portion should go back to additonal debt repayment, then to pay you. You only pay yourself based upon performance, and set those numbers in writing. Hence the need for the HELOC, as this will be what you live on for a while. This set up serves two purposes, first it keeps "apples with apples" business debt w/business funds payments, and second it keeps your asset free of the business. You are not swapping debt, your are using it. The fact that you force yourself to live on your HELOC also adds pressure on yourself to live frugally for a while, and to help develop that frugal mindset so crucial for business success. This will motivate you to clear up this debt as fast as you can, and get back to drawing a salary. I know this is some "tough advice", but it truly is the most applicable. It sounds like you own up to causing the problem, which is very good. Now it is up to you to turn it around. You are in essence "starting up" again.
Another important question--you alluded to it being your business, but you said it was a corporation. What kind of corp--C or S? How many shareholders? Are all of them family? Have you been paying out dividends? If you have, this is another place to cut cash flow. Dividends are taxed twice--the corporation must pay them from after-tax money, and the receipent has them taxed as income. If the only shareholders are family, there are other ways to get cash out that are deductible. If you have outside shareholders, how many? How often and how much dividends are paid? Oracle has a good suggestion in using SCORE to help form a business plan. And Bizwiz is spot on about reducing expenses, both business and personal. One big example I've seen--if the business has a coffee service, cancel it. Buy a coffee pot, go to Sam's Club and buy coffee, and make your own. There are other things like this. A cleaning service can be canceled and you can clean your own offices. As Biz said, if it's not adding to the sales, think about cutting it. On the personal side, cancel any services you have like lawn service, etc. Think about canceling your cable. Believe me, once you get used to not having TV you will realize how liberated you are. You'll have more time to put into the business or something else.
As the picture became apparent, so did the role of the expense side in the current conditions. Biz and Hedwig have outlined very specific, practical, and decidedly advisable things for you to do. But I would stress that a good business plan is a high priority. All of the other actions can be taken in parallel, but they should all relate to the long-term plan that you are creating. One caution. Please be very realistic in your planning and be brutally realistic in assessing your progress in its implementation. Optimism is essential, but not if it clouds judgment. I sense that you have begun to take steps before things have become impossible; that is working for you. But be honest enough to yourself to admit when it is no longer working and make changes as the situation warrants. If recovery isn't a likely outcome, pulling the plug earlier rather than later is the preferred option. Taking pain on your terms is a lot more tolerable than taking pain on someone else's. No time like the present to get started, eh ? Good luck!
