Buying a Business

[mattfx]

I think that may be a touch pessimistic Lance surely? Although I don't disagree with everything; when I was working as a permie at a Value Added Reseller the company owners actually took home less than the sales director did by the time they had to fork over his commission. That also being said, I think the pair of them worked for the sum total of about 20 hours a week between the two of them, so not exactly what i'd call driven business people.

[SueEllen]

Plenty of folks do.... Pipedream becomes reality and all that.

Admittedly, the fact it's right on my doorstep in the middle of rural Dorset is a bit of a driver.

How much mail order does the business have? How is the courier? How does the business advertise? How does the business display themselves online?

I buy some of my garden plants online on eBay. I find some of the producers aren't as small an outfit as I initially think they are.

[vwdan]

you will end up owning your own job, never having a holiday, never being able to trust staff and make less money than contracting.
I've seen many do it. The only ones where it will work is if there's nothing else they can do.
You'd have to work your balls off to earn half what you would contracting.

Been mulling over this a little recently. Mrs is after a "way out" of her current work situation and we've got some cash floating about that I'm not quite sure what to do with.

Aaaand, basically - I keep coming back to the above. The last line in particular - right now, I can rock up and not work particularly hard and somebody will hand me a whole chunk of change with nearly no overheads.

You can definitely make some serious money in retail like business ventures (I notice a lot of aircraft owners at my flying clubs own some variant of shop), but you can just as easily be piss poor with a huge amount of work. The number of empty retail units and general churn highlights that in a huge way.

That said, I don't agree with NLUK that just because you haven't, means you shouldn't. The real winners in life (excluding those born into it) will always be the risk takers and opportunity spotters - it's just that for every Branson there's thousands of people who could have done exactly the same and lost every single penny.

[Lance]

I think that may be a touch pessimistic Lance surely? Although I don't disagree with everything; when I was working as a permie at a Value Added Reseller the company owners actually took home less than the sales director did by the time they had to fork over his commission. That also being said, I think the pair of them worked for the sum total of about 20 hours a week between the two of them, so not exactly what i'd call driven business people.

Yes. Deliberately pessimistic.

It is for some people, and not for others. Quite often the vision of running a business (and I don't mean a PSC) is very tempting. I continually look myself. But I always remind myself the downside.

If you want to be a shopkeeper for the rest of your life then go for it. They will usually be successful in themselves. What they won't often do is scale to a larger business you can sell and retire on the cash. And if the gloss fades after 5/10 years and you look to sell and there's no real gain, is that really what you wanted.

Good luck if you go for it OP.

[northernladuk]

That said, I don't agree with NLUK that just because you haven't, means you shouldn't. The real winners in life (excluding those born into it) will always be the risk takers and opportunity spotters - it's just that for every Branson there's thousands of people who could have done exactly the same and lost every single penny.

To NLUK's point, just because you don't have experience in something doesn't mean you can't try it.

OK I'll take that. Both of you said the same so you're probably right. That said I live in a small town full of shops that over the time have been bought for the wife or on a fancy and the turn over of shops is incredible. She fancies the idea of a high end boutique clothes or furniture and it just doesn't pan out because it's a pipe dream with no knowledge or skills to back it up. Probably also a lot to do with Lance's comments about it being full time and a lot harder than they realise... but as you say... sitting there complaining isn't the way to make it work.

What I was more trying to get at was looking a business just on it's books and asking if it's a goer seems like a poor start. Having the ability to market, run and manage a business comes first, an idea of a market to sell to and why comes second and so on until the actual fact the business you buy makes money under the old management I would have thought was low on the agenda. That's for you to turn around if you are good enough. Might be profitable on the books run properly by the old crowd. Not too difficult to come in and destroy that in no time.

Just seemed to be an arse about face way of approaching it.

[Lance]

What I was more trying to get at was looking a business just on it's books and asking if it's a goer seems like a poor start. Having the ability to market, run and manage a business comes first, an idea of a market to sell to and why comes second and so on until the actual fact the business you buy makes money under the old management I would have thought was low on the agenda. That's for you to turn around if you are good enough. Might be profitable on the books run properly by the old crowd. Not too difficult to come in and destroy that in no time.

Just seemed to be an arse about face way of approaching it.

In some ways you're right. You need to determine if the current trading is because it's a good business, or because of the current owners. And no accountant can tell you that.
You need to read the accounts yourself and make your own judgement, then look at how the business runs, directly.
If you're still happy then you bring in the accountant for due-diligence.

[mattfx]

Thought about this whilst I was on lunch - another thought; alongwith being a shopkeeper you essentially have to become a social media mogul as well; My step brother has his own nutrition business (100% product based, no services) and he lives on Instagram. Apparently 70% of his sales pipe comes from 20-somethings on there. Not going to be exactly the same with your potential garden centre, but certainly you'll have to get your head around a lot of targeted advertising and such, if you want to succeed.

I guess as a few others have correctly pointed out, just depends on what you want your life to look like for the next few years and whether this is a serious project for you.

Good luck!

[BrilloPad]

Anyone here got any experience of buying a small retail business (specialist garden centre, in this case).

Would be interested to know how to go about establishing if somethings going to be a goer or not.

I guess it all boils down to price and how profitable the business is by hiring an accountant to look at their books.

Be interested to hear from anyone who has taken the plunge....

Just put the books online and NLUK will give you the full SP....

[northernladuk]

Just put the books online and NLUK will give you the full SP....

I'd have to ask my accountant first.

[Big Blue Plymouth]

Why is somebody selling a profitable company?

What I was more trying to get at was looking a business just on it's books and asking if it's a goer seems like a poor start. Having the ability to market, run and manage a business comes first, an idea of a market to sell to and why comes second and so on until the actual fact the business you buy makes money under the old management I would have thought was low on the agenda. That's for you to turn around if you are good enough. Might be profitable on the books run properly by the old crowd. Not too difficult to come in and destroy that in no time.

Just seemed to be an arse about face way of approaching it.

I suspect it currently isn't profitable.

It's being sold because the current owner has another business that is taking up too much of his time. And, yes, it probably does need turning around - there's no online presence at all at the moment.

I'd have thought looking at the books would have some kind of leverage in negotiating a price and also give me insight into all his outgoings too.

The thing that slightly concerns me initially is that it's on land owned by another business, effectively a concession. Not sure how that relationship would evolve.