Several Questions for starting a new business

Jayop

Hi, I've been interested in running a business myself for years. I've worked in retail, business development and hospitality all my life so I think I have a lot of the skills needed to make it work.

My issue is that there's a few things I'd like some advice about before I go talking to people about it so I don't look like a complete idiot. (I'm sure I'll manage that here)

1) I've identified what I feel is the most suitable premises for the business within the area I can operate. The problem is that this building which is the only one in anyway suitable has a low ceiling. Is there any possibility if you were renting the entire building on a long term lease that the landlord would allow you to remove part of the ground floor ceiling to increase the height available? I understand that this may not be possible physically, but I just want to know if it's even worth asking about.

2) The business is a well established model and I've looked at a lot of business plans from existing businesses and worked out a lot of the rough figures that I would need to get started. I have literally no idea about business capitol loans to new businesses. If I was to go in with a rock solid business plan will they look at it with no other funding or do I need to have a set percentage put away?

This isn't something that would make anyone an overnight millionaire, but it would be a stable local business that could potentially employ 3-5 people in an area that's pretty light on development and jobs.

Any advice would be greatly appreciated. Thanks!

jimmii

1) That could be incredibly expensive! No harm in asking.

2) Experience and a good business plan are definitely going to help but the bank are unlikely to put up all the money and often times they will only offer secured loans.

I worked in retail for years and it really gives you no idea what its actually like to running your own shop. I found this out the hard way! Go to your local enterprise office and they should offer a start your own business course which will cover a lot of things you will need to know.

Jayop

jimmii wrote: »

1) That could be incredibly expensive! No harm in asking.

2) Experience and a good business plan are definitely going to help but the bank are unlikely to put up all the money and often times they will only offer secured loans.

I worked in retail for years and it really gives you no idea what its actually like to running your own shop. I found this out the hard way! Go to your local enterprise office and they should offer a start your own business course which will cover a lot of things you will need to know.

Thanks for the reply Jimmii. At this stage it's in the very very early stages of an idea. I would absolutely plan on doing a course if it goes any further than the stage it's at and I've already studied business in college but that was much more theoretical than practical. My father ran shops for years in Northern Ireland so he would be a fantastic source of information too.

I'm going to have a look at Leader funding too because I know some enterprises doing what I am looking at have secured this in the past, but again I'm unsure of the rules with regards Leader funding combined with bank lending. If I had some idea of the levels available and from banks I could then attempt to get some investment from personal sources.

This would be a hell of a lot simpler is some before unknown rich relative were to leave me a ball of cash!!

Jayop

Oh and security against my own home is likely a non runner due to negative equity.

jimmii

Yeh its tough to generate funds as a start up I was lucky in that I didn't have to go to the banks not sure I would have had a chance if I did have to. Shops are really hard to get running make sure you plan to have enough money to live off for a minimum of 6 months and ideally a year and ensure you have a big enough contingency in case of unforeseen circumstances in the business we didn't have enough of either of these and it made it really tough! I remember there was one day where all our accounts where empty and the only cash was the float from the till! We some how scraped through but wouldn't fancy doing it again!!

Jayop

jimmii wrote: »

Yeh its tough to generate funds as a start up I was lucky in that I didn't have to go to the banks not sure I would have had a chance if I did have to. Shops are really hard to get running make sure you plan to have enough money to live off for a minimum of 6 months and ideally a year and ensure you have a big enough contingency in case of unforeseen circumstances in the business we didn't have enough of either of these and it made it really tough! I remember there was one day where all our accounts where empty and the only cash was the float from the till! We some how scraped through but wouldn't fancy doing it again!!

OK, to avoid beating around the bush it's an indoor play centre that I was talking about. Knowing that will make the questions and answers easier.

It's pretty expensive enterprise to start, a lot of investment for equipment and to set up a suitable premises (more if a lot of work is needed to raise ceiling level) and then your rent, insurance, wages all on top of that. The thing is though that after that initial funding is out of the way and allowing for the standard costs, there's really no big cost of stock or other ongoing expenses other than keeping a small cafe supplied. It's also a business with a strong pretty instant cash flow so once you get the doors open you can be expecting to have takings coming in immediately. The only staff out of the blocks would be family and maybe 1-2 part time staff.

I guess I should call the number in the premises that I was looking at to see what type of situation is available.

jimmii

A cafe and play centre is going to have a lot to sort out! The thoughts of the insurances costs on that are pretty scary!! Is there an equivalent of Disclosure Scotland here? I assume there is a lot of red tape that needs to be fought through to open something like that I would imagine its quite tricky.

Jayop

jimmii wrote: »

A cafe and play centre is going to have a lot to sort out! The thoughts of the insurances costs on that are pretty scary!! Is there an equivalent of Disclosure Scotland here? I assume there is a lot of red tape that needs to be fought through to open something like that I would imagine its quite tricky.

I'm lead to believe the insurance is surprisingly low in comparison to many other businesses. Due to the nature of the centres and the fact they are all soft padded means that serious accidents rarely happen.

Red tape would be quite a bit I'd guess too so if I had an idea of funding and premises the next step would be to contact other people who have done it in the past and see if any of them are willing to discuss the details.

There's Garda vetting in place in Ireland, however I don't know if it's mandatory for something like this. Regardless of whether it is or not, all staff would be checked. Both myself and my wife are already vetted, her as she works in childcare and me because I train kids football.

In terms of funding if your going to a bank and asking for 50K, you'll need to be putting in 50K yourself and signing a personal liability on the 50K that they give you.
Thats the most basic criteria before they've evaluated your plan/concept/profits.

Jayop

Deleted User wrote: »

In terms of funding if your going to a bank and asking for 50K, you'll need to be putting in 50K yourself and signing a personal liability on the 50K that they give you.
Thats the most basic criteria before they've evaluated your plan/concept/profits.

Ah, thanks for that. So it's kind of 50/50 funding.

Aye, bank loans are no easy thing for startups. You need to be in the mindset of the banks first of all to understand how they see it, and not be of the mindset that they should be 'helping' you fund your business.

And my experience is if you need 25K, you ask for 50K. The first time i got a business loan I only got half of what I wanted, the second time when I asked for double what I needed, he gave me half. He was confused why I was so happy walking out the door lol

Jayop

Good advice!!

makeandcreate

Jayop wrote: »

OK, to avoid beating around the bush it's an indoor play centre that I was talking about. Knowing that will make the questions and answers easier.

It's pretty expensive enterprise to start, a lot of investment for equipment and to set up a suitable premises (more if a lot of work is needed to raise ceiling level) and then your rent, insurance, wages all on top of that. The thing is though that after that initial funding is out of the way and allowing for the standard costs, there's really no big cost of stock or other ongoing expenses other than keeping a small cafe supplied. It's also a business with a strong pretty instant cash flow so once you get the doors open you can be expecting to have takings coming in immediately. The only staff out of the blocks would be family and maybe 1-2 part time staff.

I guess I should call the number in the premises that I was looking at to see what type of situation is available.

I know the playcentre in Gort received Leader funding. I also know the business has not been as successful as similar projects in Oranmore and Ennis. As mum of 2 smallies I have been to many, many play centres in the last 5 years in a lot of counties and poor/uninterested staff, dirty/dusty areas, unchecked toilets are common. Others just try and leech every penny off you with "extras" - boats, go karts, face painting, pottery painting, drinks etc. Somewhere between the two is the happy medium.
I'd go visit a cross section - I'm sure they'd help you with info.

skelligs

Good and bad here...

Firstly - forget about the current premises. Landlord won't do physical changes as it would require plannign permission. Look for another premises - try a business park or other small warehosue type unit. They'll be far far cheaper to rent and the rates will be a lot lower too.

Secondly - planning. You will need plannign for entertainment/leisure use. If the cafe is small, that won't need planning but will need hse registration (free)

Thirdly - cafe. As above HSE regustration. If you are doing any form of cooked foods or chilled foods you'll need haccp training, well kitted kitchens, ventilation systems etc. - Look at intially doing ambient buns/ coffee / confectionery and have a deal with a local pizza delivery service that gives you a perecntage of the pizza price.

Finally, Finance. Various options. EIIS scheme if you know people willing to invest http://www.revenue.ie/en/tax/it/leaflets/it55.html - This gives them up to 41% tax relief on thir investment - so a 10k investment really only costs 5.9k. Leader funding may be available too. If the equipment is moveable, it can be leased - easier to get a lease than a loan. And if you get some funding from family and have a few bob yourself, the bank may give an overdraft.

The good news is whilst its hard work, I don't remember seeing many of these places closing down in the recession - hence they must be fairly robust financially.

If you are anywhere in the Naas/Newbridge area yo can see three places almost next to each other and all seem to do well. One in M7 Business Park (at motorway junction) and 2 in the Toughers Business Park on the Newbridge road (tricky tricksters and the K-Bowl soft pay area)

allibastor

Jayop wrote: »

OK, to avoid beating around the bush it's an indoor play centre that I was talking about. Knowing that will make the questions and answers easier.

It's pretty expensive enterprise to start, a lot of investment for equipment and to set up a suitable premises (more if a lot of work is needed to raise ceiling level) and then your rent, insurance, wages all on top of that. The thing is though that after that initial funding is out of the way and allowing for the standard costs, there's really no big cost of stock or other ongoing expenses other than keeping a small cafe supplied. It's also a business with a strong pretty instant cash flow so once you get the doors open you can be expecting to have takings coming in immediately. The only staff out of the blocks would be family and maybe 1-2 part time staff.

I guess I should call the number in the premises that I was looking at to see what type of situation is available.

I have actually seen one of these do badly, down in Limerick. The place was very god at the start but went down hill as the owner made new rides which were pay for use ones and so one. The place is very unsafe now and I took my kids out of there. The owner is an ex builder and very ignorant.

The general rule in these places is make sure the kids are happy and safe, and that parents can see this very easily.
I was looking at one of these myself in my area, the initial costs to set up are around the 35-45K mark, not too bad and a return on investment is about 2-3 years.

Just make sure your staff are not the usually spotty teen who has no interest in being there.