Banks trying to kill SME's

Calibos

Another option mooted around the table was that seeing as the house will have to be sold to clear the outstanding debts of the shop should the shop close at this point in time, There's enough equity in the house even with the renovation mortgage on it for the parents to buy themselves a smaller house cash and also buy the shop premises cash. The current 20,000 or soon to be 15,000 rent no longer needing to be paid is 100,000 -133000 in turnover with the margins we are working on atm. Gives us a lot more breathing room and like I said at the price for the premises mooted it seems like a no brainer that even if the business still ultimately failed we could derive benefit from owning the premises in multiple ways outlined earlier. So it can still kinda act as the parents retirement fund if the business goes down. If however we make a success of it, it's effectively a open term interest free loan to the shop from the parents retirement pot. It's the nuclear option I'll grant you and one would have to really research the ins and outs to ensure we weren't spending good money after bad. Ideally though we'd like to save the business, borrow the money ourselves and keep the family homestead which is I readily convenient being next door to the shop with access out back between them. For instance 4 blokes working there, everyone knows we are family and will fight, everyone knows we live right next door and can be out in the shop in seconds if needed means we don't even suffer much pilferage never mind actual robberies. 3 'attempted' robberies in 30 years whereas some other shops in the area can be unlucky and suffer 3 in a single year. I've had a gun pointed in my face which was in my hands when the guards arrived and not the assailants and disarmed a knife wielding thug with a knife to my brothers throat the gas thing is, is that I've never thrown a punch in my life and wouldn't hurt a fly, but by foolishly some might say, fighting back on instinct, we have developed a reputation with the criminal fraternity that were not to be messed with and are 'mad bast@rds'. Nothing could be further from the truth:D

pedroeibar1

Calibos wrote: »

Another option mooted around the table was that seeing as the house will have to be sold to clear the outstanding debts of the shop should the shop close at this point in time, There's enough equity in the house even with the renovation mortgage on it for the parents to buy themselves a smaller house cash and also buy the shop premises cash. The current 20,000 or soon to be 15,000 rent no longer needing to be paid is 100,000 -133000 in turnover with the margins we are working on atm. Gives us a lot more breathing room and like I said at the price for the premises mooted it seems like a no brainer that even if the business still ultimately failed we could derive benefit from owning the premises in multiple ways outlined earlier. So it can still kinda act as the parents retirement fund if the business goes down. If however we make a success of it, it's effectively a open term interest free loan to the shop from the parents retirement pot. It's the nuclear option I'll grant you and one would have to really research the ins and outs to ensure we weren't spending good money after bad. Ideally though we'd like to save the business, borrow the money ourselves and keep the family homestead which is I readily convenient being next door to the shop with access out back between them. For instance 4 blokes working there, everyone knows we are family and will fight, everyone knows we live right next door and can be out in the shop in seconds if needed means we don't even suffer much pilferage never mind actual robberies. 3 'attempted' robberies in 30 years whereas some other shops in the area can be unlucky and suffer 3 in a single year. I've had a gun pointed in my face which was in my hands when the guards arrived and not the assailants and disarmed a knife wielding thug with a knife to my brothers throat the gas thing is, is that I've never thrown a punch in my life and wouldn't hurt a fly, but by foolishly some might say, fighting back on instinct, we have developed a reputation with the criminal fraternity that were not to be messed with and are 'mad bast@rds'. Nothing could be further from the truth:D

This whining has now turned into bulls#1t because several serious suggestions have been ignored by you and we get daft nonsense & emoticons.

WTF 1? You are behind a counter and manage to wrestle a gun from an armed raider? All over a paltry few quid in a till? And you disarm a guy with a knife and think it is "gas"?

WTF 2 ? “Daddy, I want you to sell your house so that we can shove you into a small gaff and we can have the business!” What makes you think you are so special or gives you that sense of entitlement? What do you think your father will live on for his remaining years?

Four staff? That should be a salary bill of minimum 200k. Assuming a gross profit of 30% (above the average) that would indicate a required turnover of more than a million to remain profitable. Call that 20k a week, average purchase of 5 euro gives 4000 transactions or nearly 600 purchases a day? That averages to a purchase every single minute even with extended opening hours.

The situation is analogous to the tiny farms in Famine era Ireland, when every son on marriage expected as his due a sub-division of the farm to live off instead of realising it was economically unviable and that he needed to get out. So he whined and blamed the nasty landlord for not allowing subdivision, in your case it’s the nasty bank for not providing money.

antoinolachtnai

Your business certainly has advantages. However, there are other businesses in your sector that have different, though arguably bigger, advantages.

I don't see why your father shouldn't get market rent for the property. He really needs this for his retirement.

If you are enthusiastic about this and think you can do it and have your father's confidence, I think you should take it over as the sole proprietor (i.e., without your brothers as shareholders, though they might still work there).

You really need to sort out your situation before you take over the business. You really need to understand the financing. There is a good chance your credit will dry up, especially the bank credit and then you will be dependent on your new landlord's credit.

Calibos

pedroeibar1 wrote: »

This whining has now turned into bulls#1t because several serious suggestions have been ignored by you and we get daft nonsense & emoticons.

What suggestions have I ignored. Was I supposed to run out and talk to all parties and implement advice within hours of these postings. I've taken all the great advice on board??

WTF 1? You are behind a counter and manage to wrestle a gun from an armed raider? All over a paltry few quid in a till? And you disarm a guy with a knife and think it is "gas"?

In the former case it was my father behind the counter starting to swing at them and I committed on instinct to help, disarming the assailant in the process. In the second case I ran out from the back after hearing commotion to see my brother with a knife to his throat. Again I acted on instinct. I said in that last post that it was foolish and pure instinct. Of course I don't think its a rational choice to make for a few quid in the till. Whats gas is not the events themselves, but the fact by virtue of the events happening as they did rightly or wrongly, we garnered ourselves a reputation that we were too risky a place to rob, despite none of us ever throwing a punch in our lives. I only took that tangent in my post to explain one of the reasons that ideally we'd like to keep the house and the shop. Its a great benefit to security

WTF 2 ? “Daddy, I want you to sell your house so that we can shove you into a small gaff and we can have the business!” What makes you think you are so special or gives you that sense of entitlement? What do you think your father will live on for his remaining years?

No, its ,"Son, If we have to sell the house anyway if we close the business, what if we bought the premises cash?" Well heres the pro's and cons of that as I see it Dad.......

Four staff? That should be a salary bill of minimum 200k. Assuming a gross profit of 30% (above the average) that would indicate a required turnover of more than a million to remain profitable. Call that 20k a week, average purchase of 5 euro gives 4000 transactions or nearly 600 purchases a day? That averages to a purchase every single minute even with extended opening hours.

Jaysus, just because you won't get out of bed for less than 50 grand doesn't mean the rest of us won't. The wage bill for the 3 of us sons topped out at less than 60 grand at its height.

The situation is analogous to the tiny farms in Famine era Ireland, when every son on marriage expected as his due a sub-division of the farm to live off instead of realising it was economically unviable and that he needed to get out. So he whined and blamed the nasty landlord for not allowing subdivision, in your case it’s the nasty bank for not providing money.

.

Duckett

As suggested by a number of contributors - you do really need to access and take professional advice - both on financial and succession matters. The Small Business Advice Programme might be an option for you ie. confidential advice from experienced advisors selected to suit your particular situation. Link as follows:

http://www.smallbusinessadvice.ie/

Calibos

Thanks everyone.

Just because I'm still posting in the thread doesn't mean I'm not taking/heeding/agreeing with/listening to the advice. If I am still talking about a certain aspect after it was covered earlier in the thread, it doesn't mean I'm not heeding the advice on that aspect from earlier in the thread. I might be filling in details or clarifying stuff brought up by follow on comments or new posters just coming in. You've all given me great advice on all the broad strokes stuff I needed advice on and I know I have to talk to advisors going forwards. Just because I'm still replying in this thread and haven't booked the meetings within hours of the thread postings doesn't mean I'm going to ignore the advice.

Thanks again everyone.

Calibos

Duckett wrote: »

As suggested by a number of contributors - you do really need to access and take professional advice - both on financial and succession matters. The Small Business Advice Programme might be an option for you ie. confidential advice from experienced advisors selected to suit your particular situation. Link as follows:

http://www.smallbusinessadvice.ie/

Thats great info actually. Any other organisations I should be thinking about contacting for advice in dealing with the banks and revenue etc ie. Widening the scope of people I can get advice from outside of our current Accountant, Solicitor and Lease negotiators etc

Revenue for example we're finding hard to deal with which sticks in the craw a bit when a local coffeeshop were caught for not paying a cent in VAT for 9 years and non custodial sentence imposed on the proprietor and yet they are still trading away in order to pay back 9 years of arrears under the same management. It feels like the old adage of when you owe the banks a million they own you but if you owe them 100 million you own them. ie. Owe revenue a quarters arrears and they'll shut you down, owe them 9 years arrears and they'll keep you open so they get their money back.

Before anyone accuses me of the blame game again. I totally accept that most if not all of our current problems were caused by ourselves not planning well to cope with the downturn. I simply needed advice on how to deal with the outside problems like the banks and revenue and old upwards only lease that weren't helping matters. Save the business and then implement changes and correct our mistakes of the past that mean this doesn't happen again.

pedronomix

With every respect to all busines organsations and professionals, this is just kicking the can down the road. Unless you can take it over and make it work financially by throwing Dad and the lads over the side/under the bus, walk! Most of the suggestions are just avoiding the elephant in the room. old rule in business, tackle the hardest bit first and do it yourself!!

delahuntv

Banks - do a good business plan and show where you expect to see growth.

Revenue - yes they are strict and probably that's good. It stops you spending money due to them. The coffee shop is probably paying a penal interest rate and are on a watchlist.

My advice is to look at becoming part of a symbol group. In addition to offers, they have loads of people to give advice based on years of experience. They also have access to finance and can introduce new revenue streams.

Finally, if you don't have formal business training maybe look at business coaching - Aib put me in touch with action coach and it's made a very positive change to my business.

antoinolachtnai

You really have to think about what is right not for your family, but for you.

It is unfortunate, but it is true. This may well be a good business, but unless there are prospects to maybe double or triple the profits, or they are able to put up significant cash, it is not a good business to be in partnership with your family in. It is just too small and none of you will be able to get significant wage growth out of it.

It is hard to face this, but I think this will be the reality, sooner or later.

For this reason, I think you really need your own accounting advice, not just to be relying on whatever the family has.

PS: I think you are being a bit hard on yourself and your family re wasting money during the good times. None of you were taking big money out by the sounds of it, you were just taking what the business owed you from the bad times. The problem isn't that you and your family were greedy or stupid, the problem is that the business just isn't generating enough profit for you all to prosper.

Sounds like a business of perpetual pain and risk to me with the only thing worth holding onto being the family traditions. Sometimes there are easier ways to make money and things to put your mind to that could be a lot more rewarding.

Being at the mercy of banks is not a fun place to be, especially given high level of moron that works in the industry. I deal with banks changing goal posts, going back on agreements constantly. Its easy to make the mistake that your 'in this together' when in fact they are in it for themselves and thats it.

Is the family tradition worth chasing what seems like buttons even if things are good?

delahuntv

One other thing - I would forget about purchasing the property. It will screw-up your cashflow and take your mind of the retail business.

Look at the biggest names in retail - how many of them own the properties they trade from. I'd concentrate on where you can earn money rather than property speculation.

As you have security of tenure and as the rent will be fixed for the next 5 years, the price of the property will not increase much in the intervening period.

If in 3 or 4 years you find things are getting better and the cashflow allows it, THEN, it could be considered. But at present, it would be commercial suicide.


IMO - 1st step is talk to a symbol group.

Mace / Spar / XL = http://www.bwg.ie/#

Gala - http://www.gala.ie/template1.php?page=why_gala?

Daybreak - http://www.daybreak.eu/whychoosedaybreak.html

Calibos

We've been a Musgraves customer for a long time. They did approach us about their Daybreak Franchise last year IIRC. We'd be tiny compared to the showcase stores they showed on the website. They'd be as big as the Tesco Express in the town. Think small corner shop instead (but with scope to double floor area). Anyway they wanted to strip all character out of the place inside and out and the consultant showed us the proposed refit plans and 'heavily subsidised' cost of the refit. Our share of the cost was 'only' €15,000 :eek: :rolleyes: However, even if we were amenable to that we'd not enough access to credit to pay it. That said given the age and income demographic in our catchment area which is in the most affluent quarter of the town beside the biggest amenity in the town, I felt our strategy should not be the cheapo generic franchise look but make the shop look even more traditional not less. Play up the local family shop for 80 years angle. Keeping the traditional looking frontage, Banner in the window "Serving the ******** Quarter since 1936". Traditional looking Varnished and painted wood internal shelving, counters and displays etc. Given what myself and my brother were able to do in 2 weeks after hours a few years ago with simple tools, I am confident with the right tools and my ability with my hands that we could achieve the look we wanted ourselves for a fraction of the €15,000 Musgraves wanted from us to Genericise our store. Unless Daybreak Franchisee's get even better deals and margins than their regular customers, I don't think they are any great shakes in that regard. We dealt with most suppliers direct without the Musgraves middleman historically. Twas only when the suppliers credit terms became more restrictive and cashflow meant we needed to spread out the purchases on a more as needed basis so we wouldn't be hit with big direct debits for 3 months worth of stock all in one go because of the banks slashing overdrafts. Twas only then that we started getting a lot more stock from Musgraves instead and thus lost a chunk of margin not gained it by using musgraves for more stuff. Heck, we buy our 2L soft drinks retail from our local tesco because they are cheaper than Musgraves Wholesale!! The CSNA and NFRN retailer organisations have been beating the Bank credit and overdraft cutting drum for 5 years now saying its driving hundreds of small local shops out of business every year. News Story Link

Like I said, we almost have the most affluent quarter of the town to ourselves right beside the biggest amenity in the town. 2 other local shops in this quarter went in the last decade. One of the other 2 surviving shops in the area is in trouble and up for sale and the last one has a chinese husband and wife team that have no other staff and have no life and never see each other as its either one or the other on duty. God love them but I can see them burning out eventually and closing up to try their hand at something else.

Point is, given some of the above and stuff I've alluded to in previous posts, I can see, without us doing much of anything, returning to 60,000 Net profit at the very least, if we can survive the current credit issues to a time when consumer confidence returns which is the trajectory the improving economy and economic outlook is on. ie. even if it never reaches celtic tiger levels, we've less competition than we had during the celtic tiger. However, given the prospect of increasing the size and improving the look and the scope to take on more product lines etc I think if we survive we could look forward to an even higher Net Profit than the highest we had during the Celtic Tiger.

delahuntv

the problem is the vast majority of people don't give a rats ass whether its a 80 year family business (it still can be under a symbol group) Some of the older generation will care, but they'll still shop in aldi / lidl / tesco etc.

Froma personal poit of view I travel quite a bit around stores (heading to Waterford now, will be Cork later, then further west tomorrow.

I'll drive through Kilmeaden and I'll stop at the Daybreak store there for a coffee and sambo - why? Because I KNOW they will have decent coffee. I KNOW they will have a decent sambo. I KNOW it will be clean.

Same if I drop into the daybreak in abbeyfeale - I won't call into a unbranded store because I don't know what they will have.

Years back, having your name over the door was important (Wallaces in Kilmacud, Higgins of Clonskeagh etc) as the locals shopped local, there was probably only one car in the household and the local store could deliver or was easy walking distance - people are more mobile these days, the want certainty especially if they are new to an area. Hence they will go for the brand name.

On my own business, I changed format in one store last year. I ADDED a lot of new products, but the brand name over the door changed. Turnover dropped over 30% - 3 months later I changed back. Less product choice, less brand and turnover went straight back up.

You may not like it, but the power is in the brand over the door.

Calibos

I suppose part of my reticence to go Symbol group is that I worry about the corollary to the change you made to that store. Turnover drops when we just become another generic symbol group shop just like all the others. We are no longer the landmark people have used for directions for 80 years. Passing trade customers often tell us that its great to see a shop like us. That all shops are all the same these days. Theres an ex Spar in the centre of the town thats been through a couple of symbols since they left the Spar group which they found too restrictive. They're still in trouble too and the Symbols don't seem to be helping them? I guess thats where my fear of symbols is coming from. Too restrictive without bringing enough of a benefit.

antoinolachtnai

Calibos wrote: »

Anyway they wanted to strip all character out of the place inside and out and the consultant showed us the proposed refit plans and 'heavily subsidised' cost of the refit. Our share of the cost was 'only' €15,000 :eek: :rolleyes:

You have a plan to possibly buy the freehold. You could get the capital from the same source.

I felt our strategy should not be the cheapo generic franchise look but make the shop look even more traditional not less. Play up the local family shop for 80 years angle. Keeping the traditional looking frontage, Banner in the window "Serving the ******** Quarter since 1936". Traditional looking Varnished and painted wood internal shelving, counters and displays etc. Given what myself and my brother were able to do in 2 weeks after hours a few years ago with simple tools, I am confident with the right tools and my ability with my hands that we could achieve the look we wanted ourselves for a fraction of the €15,000 Musgraves wanted from us to Genericise our store.

This is a workable solution. It is all about developing a high quality product and high quality service, and being renowned for it. The problem is that to do this well will cost you a lot more than €15k. You could spend that much on design fees and print/signage alone. This could work if you had a big enough floor plate and ambitions to expand (a la Mortons) but this probably isn't your situation.

Twas only when the suppliers credit terms became more restrictive and cashflow meant we needed to spread out the purchases on a more as needed basis so we wouldn't be hit with big direct debits for 3 months worth of stock all in one go because of the banks slashing overdrafts.

I can understand why the bank did what they did. Overdrafts are not intended as stocking finance. Holding stock also puts pressure on space.

Twas only then that we started getting a lot more stock from Musgraves instead and thus lost a chunk of margin not gained it by using musgraves for more stuff. Heck, we buy our 2L soft drinks retail from our local tesco because they are cheaper than Musgraves Wholesale!! The CSNA and NFRN retailer organisations have been beating the Bank credit and overdraft cutting drum for 5 years now saying its driving hundreds of small local shops out of business every year. News Story Link

The credit ombudsman is open to hear these sorts of complaints. I really do think that at least a significant proportion of small retail businesses were over financed during the boom.

Like I said, we almost have the most affluent quarter of the town to ourselves right beside the biggest amenity in the town. 2 other local shops in this quarter went in the last decade. One of the other 2 surviving shops in the area is in trouble and up for sale and the last one has a chinese husband and wife team that have no other staff and have no life and never see each other as its either one or the other on duty. God love them but I can see them burning out eventually and closing up to try their hand at something else.

I know a nice town in suburban Dublin (one of the swankiest) and the traders say that the problem with //townname// is that people from //townname// spend ****-all money in //townname//.

Being in an affluent area will do no good if you don't have the cash and expertise to invest in the business. The strength of your business is in the footfall, the volume.

It is a bad sign, not a good sign when businesses around you are going wallop. Whilst the chinese couple may be working extremely hard, they may be building some sort of equity as a result. It may not be a good lifestyle, but it may be good business.

Point is, given some of the above and stuff I've alluded to in previous posts, I can see, without us doing much of anything, returning to 60,000 Net profit at the very least, if we can survive the current credit issues

Is that 60,000 EBITDA after having paid everyone involved (including owner) a proper wage for all the hours they work? Your wage bill should, to my mind be at least 90,000 euros to cover 25 hours a day of work. I can't see it being easy to provide top notch retail for less than that.

Still, you should definitely take the time to flesh out your business plan into more detailed projected accounts.

to a time when consumer confidence returns which is the trajectory the improving economy and economic outlook is on. ie. even if it never reaches celtic tiger levels, we've less competition than we had during the celtic tiger. However, given the prospect of increasing the size and improving the look and the scope to take on more product lines etc I think if we survive we could look forward to an even higher Net Profit than the highest we had during the Celtic Tiger.

It certainly is possible, I don't deny it, but you have to look carefully to make sure you have the team, and the capital to do it.

I think you would benefit from talking to a lot of people who are in and who were formerly in your industry. It is really worth your while reaching out to these people and getting their views. There is a lot of wisdom out there.

Retail is a really tough, sophisticated industry now, demanding large investments. I don't envy you.

pedronomix

Not at all sure why I am still posting on this item. OP keeps changing the goalposts without ever addressing the real issues and is facilltated by more off the point advice. So, take the wages as long as you can get them and when it finally dies, you can say well we did our best!!

Calibos

What are 'The real issues'. How do I address them?? Certainly theres advice for what to do if the business survives. Keep paying the brothers a pitance or hire outsiders and pay them a pitance and build up working capital which reduces reliance on credit from the banks going forwards. Advise on ways to increase turnover and profitability etc Fine. It makes sense. Doesn't help at the moment with no access to credit to implement the things that might help to increase turnover and if we pay ourselves €50 each less we'll be on Dole Money.

Look we can all leave it there at this point. I've gotten some great advice, been told whats realistic and whats not, gotten some links, told who to talk to etc.

I've been told over and over that I need professional advice which I already knew I needed before I even started this thread never mind bumped it a year later, but wanted a sounding board for some of my questions before I went to talk with the advisors and possibly made a fool of myself. The fact that I didn't pull out of the thread immediately to go talk to the advisors and kept the conversation going a couple of days more seems to have given some posters the impression that the advice went in one ear and out the other for some strange reason.

I'm not sure how I've changed the goalposts. If I started the thread with every bit of relevant information about the size, structure, history of the business, finances of the business etc etc all in the first post it would have been a 10,000 word thesis which would invoke the TLDR response and I'd not expect anyone to read it. It wasn't goalpost moving but more like adding more relevant info as needed. EG. Only when someone alluded to a €200,000 wage bill do I feel the need to clarify that none of us expect anything near that divided by 3 and that at its height our wage bill for the minimum 3 staff excluding my father was 60,000. Thats not moving the goalposts surely? Am I moving the goalposts by not being entirely convinced about joining a Symbol group yet? Am I moving the goalposts by agreeing with posters who advise to shelve the Premises purchase for a few year??

Or are you getting frustrated with me because I didn't agree with everything you said, the moment you said it and act on it straight after you said it? Crikey, I only bumped the thread 2 days ago. Give me time to process the advise and set up the fecking meetings

pedroeibar1

pedronomix wrote: »

Not at all sure why I am still posting on this item. OP keeps changing the goalposts without ever addressing the real issues and is facilltated by more off the point advice. So, take the wages as long as you can get them and when it finally dies, you can say well we did our best!!

+1. The OP likes hearing his own voice. He has a cornershop located in Bray and despite it being a nice town to look at (well, from afar) Bray is neither prime location, affluent nor known for its arti/fartiness like Sandycove (Glasthule to old gits like me!). Then I read the following -

Calibos wrote: »

That said given the age and income demographic in our catchment area which is in the most affluent quarter of the town beside the biggest amenity in the town, I felt our strategy should not be the cheapo generic franchise look but make the shop look even more traditional not less. Play up the local family shop for 80 years angle. Keeping the traditional looking frontage, Banner in the window "Serving the ******** Quarter since 1936". Traditional looking Varnished and painted wood internal shelving, counters and displays etc.

So we now have progressed to notions of Bray’s own version of a “Quarter”, with stores like Paris’ Fauchon or Hediard, or NYC’s Agata & Valentina’s or Zabars, or London's Simpsons of Picadilly. I can just imagine the gentlemen from Fassaroe queuing in their sulkies looking for a porcini ciabatta “to go”. OP has time to post reams but was ignorant of the difference between Tesco Express and Tesco Metro, despite have a few Tescos on his doorstep. Delahuntv usually posts some good stuff on retailing because he is in that sector. Was he listened to? No. (I don’t always agree with him but I do read his posts carefully!)

Discussing how to approach banks or EBITAD is pure waffle, particularly when four adults are trying to pull salaries out of an undercapitalized cornershop, one with declining turnover and an operator that thinks he knows more than Musgraves. The OP’s business is a dog for several very good reasons, most of which he has made obvious in verbose self-justification. I’m not going to say much more because I probably would get infracted.

Calibos

Jaysus!!

(Trying to keep my verbosity to a minimum here and talk like the Braaaaaaay man I am. I don't want to get infracted either)

Honestly, I'm at a loss here. I'm not convinced yet about symbol groups based on what I've seen, haven't scheduled meetings with advisors in the 3 days since I bumped the thread and I didn't hold a meeting with my brothers and father LIKE YESTERDAY! and tell them to take a hike. Is that what you mean by not listening and ignoring your advice??

Christ Almighty!! :rolleyes:

pedronomix

OP you seem you appear to have some deluded notion of entitlement that you seem to think should allow your family continue in business despite having a totally unsustainable business structure, model and cost base. Fafffing about with symbol groups, DIY woodwork, buying the property etc is simply diversionary and useless. You do need outside help to move it to a model that might work if executed properly. An expert in restructuring will give you the unpleasant options you have had on here for free. Most accountants would not have the skills or experience to give such business advice, it is a different discipline.
The bottom line here is that your family have run the business into the ground by failing to adapt and innovate in a changing market. IMHO the business is mortally wounded and does not even have a first aid kit, let alone anyone who knows how to use one.

delahuntv

I still would go the symbol route - very easy to keep your name and have the symbol.

Kelly's Gala, Crosses Centra are 2 well know retailers in my parts. Both make sure that their name is always in all correspondance / facebook etc s that people know its still the same loacl owner but just with the benefit of the symbol standards.

btw the Kilmeaden store is a Gala Express.

antoinolachtnai

I can understand the OP being upset by the comments. The problem is that outsiders see his situation very differently from how he sees it himself. At least the OP has opened himself to comment and that is a good thing. There are lots of people in similar situations who just crawl into a hole and hope that the problems go away and that everything will be alright.

I really would suggest that the OP speaks to other people in similar situations and that he reads all the specialist retail press, goes to events and conferences and talks to other people who are or have been in similar situations to his business. I don't think he will find anything much different to what has been said in this thread, but he needs to hear it from these sources, and I'm sure he will find himself having to bring his family on the journey too.

pedronomix

You are right antoinolachnai. This situation is pretty much a classic family business situation that is extremely common. OP opening up is one thing but getting upset with what does not suit is futile! He is looking for a magic wand solution, and all he needs is a magic wand or a very large dose of reality, even at this late stage. The bank are iffy, the Revenue in arrears and the creditors jumpy, unless he is very skillful, the end game wont be his or the family's call.

antoinolachtnai

The question really is how urgent the problem is. It is probably not that urgent. The problem is that the family may find itself gradually eating up its savings (which is currently tied up in property but will be released when the property is sold) propping up a business that makes no money and has no future.

Duckett

the family might just benefit from bringing in a facilitator who is independent and also respected by all the family members. Someone who has been at the coal face and can bring wisdom / counselling skills to the discussion. The DCU Centre for Family Business may be able to suggest someone .......... link as follows:

https://www.dcu.ie/centre-for-family-business/index.shtml

delahuntv

just for the OP to look at a comparison - The Gem in Bray (I know its not the OP's) was recently sold - asking price was €350k

Here are the details on the agents site about the business as it was a going concern. Gross profit seems to be about 230k incl commissions.

Turnover
The business currently enjoys a turnover of €1,260,736 p.a. exclusive of vat with a margin of 15.55. In addition there is commissions of €50,448.

Fixtures, Fittings & Equipment
An inventory of fixtures,fittings and equipment included in the sale is available on request.

Title
Freehold/Long Leasehold

Trading Hours
The current trading hours are 7.00-7.30 Mon -Fri 8.00-7.30 Sat 8.00-6.00 Sun

Price
€350,000

Calibos

pedronomix wrote: »

OP you seem you appear to have some deluded notion of entitlement that you seem to think should allow your family continue in business despite having a totally unsustainable business structure, model and cost base. Fafffing about with symbol groups, DIY woodwork, buying the property etc is simply diversionary and useless. You do need outside help to move it to a model that might work if executed properly. An expert in restructuring will give you the unpleasant options you have had on here for free. Most accountants would not have the skills or experience to give such business advice, it is a different discipline.
The bottom line here is that your family have run the business into the ground by failing to adapt and innovate in a changing market. IMHO the business is mortally wounded and does not even have a first aid kit, let alone anyone who knows how to use one.

Where is my delusion? Between 1997 and 2007 when my father took over from his father, renovated and extended the premises and replaced the last of the old staff (retired as she couldn't handle the massively increased footfall) with his sons, we nearly quadrupled the turnover to a million euro at its height. Its since dropped back 30% from those heights. Wages crept up as the money poured in but at its height it was 70,000/3. If we were deluded it'd be feeling entitled to that no matter what and cursing the banks for not letting that 'massive' gravy train continue. Instead my father has cut his drawings to the bare minimum and the 3 sons have happily taken a paycut to minimum wage while happily working longer hours for the privilege. What have I achieved right now if I tell the brothers on minimum wage to take a hike. I've replaced them with minimum wage students who have zero stake/attachment to the business, little experience, require much closer monitoring, no long standing relationships with customers etc How does that aspect of restructure help the business survive right now?

We've negotiated the lease down to the lowest realistic figure of 15,000 which should kick in within weeks. We are paying ourselves minimum wage. What else can we do with regard to costs?

If I'm deluded its that I used to think the banks would see the efforts and sacrifices we were prepared to take to save the business and might extend some credit to help us implement changes that would reinvigorate the business that might offset or more the 30% reduction in turnover caused by one of the worst recessions in living memory thats seen 1000 Newsagents/Convenience stores close across the country in the last 5 years. Instead they stuck the boot in and reduced overdraft by 66% causing other domino's to fall (margin erosion)

pedronomix wrote: »

You are right antoinolachnai. This situation is pretty much a classic family business situation that is extremely common. OP opening up is one thing but getting upset with what does not suit is futile! He is looking for a magic wand solution, and all he needs is a magic wand or a very large dose of reality, even at this late stage. The bank are iffy, the Revenue in arrears and the creditors jumpy, unless he is very skillful, the end game wont be his or the family's call.

I'm not upset with advice that does not suit. I'm scratching my head that your advice seems to be reduce your cost base/structure when I've already said that we negotiated the lease down to minimum and have reduced our wages down to minimum wage.

Credit to others who picked their way through my rambling posts and recognised that while there are cost base and structure issues that in the medium and long term need to be addressed before they cause this problem again (Wage creep, a 4th person/Father making drawings at Celtic Tiger levels again), but that at the moment they aren't the changes that can save us in the short term. Surely the only advice with regard to the structure given we've already reduced lease, drawings to a miniumum and reduced our wages to minimum wage is "Keep it that Way!"

Whether or not I'm convinced yet about whether joining a symbol group would work for us, its thought provoking 'NEW' advice, not something we've effectively already done. ie. Heres some links to Symbol groups and heres some links to SME funding sources to help you make the switch to Symbol.

I'm totally amenable to a dose of reality. "Sorry Fella, its too late to save." Means I could move on and stop stressing about this. Simply taken aback a bit to be told that its a Dog and that we RAN it into the ground despite quadrupling turnover to a million quid with a 30% turnover fall back during the worst economic downturn in decades. However, I've totally accepted the reality that we rested on our laurels in the good times and didn't drive the business to even greater heights that might have helped cushion the fall and now find ourselves in a possible catch22 where choices are more limited in how to turn it around. It may simply be a case of hopefully scraping through till business improves a bit and then with more breathing space being able to implement the changes and reinvigorate and accelerate the climb out of trouble and ensure we don't repeat the mistakes of the past.

Calibos

antoinolachtnai wrote: »

The question really is how urgent the problem is. It is probably not that urgent. The problem is that the family may find itself gradually eating up its savings (which is currently tied up in property but will be released when the property is sold) propping up a business that makes no money and has no future.

Do you reckon the quadrupling of Turnover and Profits between 1997-2007 was an aberration then with no possibility of ever returning to those levels of profits again no matter what we do? Its making a lot less money now. You don't believe we can ever make it again? Why don't you think we have a future?

Trojan

Tough crowd. Yes there are some rose tinted glasses being applied but I don't recall the OP comparing the shop to Simpsons of Piccadilly, and I think it's a bit disingenuous to suggest that's what he was doing.

In between the meta-commentary there is some really great advice on specific tactics to move the business forward positively.

I think the biggest issue here is the family angle. If he had sole control that makes it a whole lot easier to wrestle things back on track but the family issue makes it a whole lot more complex.

If it were me, I think the first step is family politics: get everyone onboard and establish a position of leadership within the business and have this acknowledged by every stakeholder. If that doesn't work out and there's resistance then I think it's time to step aside and look for another opportunity.