Business Venture

Brightfuture22

Hi everyone, I am looking for some information on something for me. I am currently working in a small yet busy shop and I have had an informal conversation with my boss who said that if he got the right price he would sell the shop. The main concern I have is that I have no savings to go towards a loan for the business and that is something I would like information on before I started pushing forward. Is there anyone that can give me some advice? Thanks in advance:)

jimmii

Its very hard to get bank funding for something like that its normally a case of trying to drum up funds privately unfortunately its worth applying as you never know and if you get rejected you could go to microfinanceireland.ie but for any shop giving a big enough profit to be worth buying they arent going to be giving you neat enough but its a start if you can get a little somewhere else. Would it be possible you buy the shop and pay them back in installments?

How hands on have you been in the non-shop floor stuff its a whole different ball game going from working in a shop to running a shop. How much will the current owner leaving effect trade? Are their customers who go there purely because of them or is there not much local competition?

Brightfuture22

jimmii wrote: »

Its very hard to get bank funding for something like that its normally a case of trying to drum up funds privately unfortunately its worth applying as you never know and if you get rejected you could go to microfinanceireland.ie but for any shop giving a big enough profit to be worth buying they arent going to be giving you neat enough but its a start if you can get a little somewhere else. Would it be possible you buy the shop and pay them back in installments?

How hands on have you been in the non-shop floor stuff its a whole different ball game going from working in a shop to running a shop. How much will the current owner leaving effect trade? Are their customers who go there purely because of them or is there not much local competition?

I have had a lot of experience in running the shop for him as regards ordering, hiring staff, dealing with new product reps etc the only thing I haven't been privy to is the accounts. I do have the qualifications for this. As for the customers they do not go there for him as a person as I would be the person a lot of customers would come to for enquiries and problems his customer service skills aren't to be desired. The shop is doing great as it is away from the town centre and it is surrounded by a lot of local amenities such as church, school, pharmacy, salon, hotel, sports clubs and local community park

jimmii

Brightfuture22 wrote: »

I have had a lot of experience in running the shop for him as regards ordering, hiring staff, dealing with new product reps etc the only thing I haven't been privy to is the accounts. I do have the qualifications for this. As for the customers they do not go there for him as a person as I would be the person a lot of customers would come to for enquiries and problems his customer service skills aren't to be desired. The shop is doing great as it is away from the town centre and it is surrounded by a lot of local amenities such as church, school, pharmacy, salon, hotel, sports clubs and local community park

Sounds like a good opportunity if you can get the money together. Why are they looking to get out?

Brightfuture22

jimmii wrote: »

Sounds like a good opportunity if you can get the money together. Why are they looking to get out?

As surprising as it sounds I love my job and love the shop and customers and feel I would be able to do a lot more and progress the business a lot more than it already has so I don't want to let the chance pass me by

jimmii

Brightfuture22 wrote: »

As surprising as it sounds I love my job and love the shop and customers and feel I would be able to do a lot more and progress the business a lot more than it already has so I don't want to let the chance pass me by

I opened up a shop its tough but it sounds like you will be starting off from a decent base. Wish I had someone like you who working for me!

With no funds to work with though I think its going to be very hard to raise the money I think your best option maybe to try work out a payment plan with the current owner see if that interests them for the stock alone in a small shop you are looking at €20k+ in addition to whatever they value the business at on top of that. You obviously have a rough idea how much the shop is turning over and if you are dealing with orders you should have a good idea at the margin in general work. Write yourself a business plan and figure out how much you think would be affordable to pay back each month and see if that tempts them. If you were able to put together a package that paid off €2k+ a month until you paid off the value they put on the business that might prove tempting to them.

antoinolachtnai

The advice to get the owner to take payments in instalments is good. However, you are going to have to put money up front. You are also going to have to pay for the legal bill (his and yours) for the acquisition.

You need to be sure that this business is actually worth buying and come up with a reasonable valuation for it. Have you ever been involved in anything like this before? If not, you have to talk to someone with experience.

If the shop is profitable, paying off two grand a month isn't the sort of thing that is going to fly. He is probably taking more than that out of the business as it is, and still owns it at the end of the month.

jimmii

Was just using 2k as a minimum really as that would be a liveable "pension" for them if that is what they are looking for as much should paid back a month as possible no matter if that is 2k, 5k or 10k. Given how much is likely to be needed there doesn't seem many other options.

IpreDictDeatH

If he is planning on selling and letting you go maybe what would have been your redundancy could unofficially be used against the cost of buying in? I dunno, clutching at straws for you.

Bandara

Have you considered trying to trash out a deal with the owner where you lease the shop from him for a year and purchase at a pre agreed price after that year ?

He can add a small premium to the lease fee to make it more palatable for him.

You need to realise that a small shop isn't really very easy to sell. Most people would want a place that has the ability to extend, and that currently has a strong turnover, as against a 'just making a good wage' turnover

You are someone he obviously trusts and is willing to do business with. A small deposit of 5k initially followed by a monthly rental may be something that has upsides for him.

Your obviously going to have to work the hell out of the business, drive it forward and improve it in order to be on a position to save/borrow from the bank after the year on the basis of your proven performance If after a year you decide not to go ahead he has the business in far better shape than before and quite possibly more saleable than before. In the meantime he has an income coming in that allows him to do other things, and possibly allows him to approach a bank for funding on the basis of the guarantees income

It's worth considering imo