Folks i know a few of you work for yourselves and maybe a few own a small business so i'm looking for some advice on it if you can.
Basically i have the opportunity to buy a small business which is surprisingly a lot less than i expected it to be going for but it does need a bit of investement for a renavation and a little shake up, what i want to know is it easy to get a business loan from a bank and what are the rates for paying back business loans. Also i have a guy who is willing to to put money upfront as a silent partner for obviously a share but i'm not so sure (risk free i suppose). I was all up for this with no hesitation but now that it's a reality i'm shiting myself TBH...I have loads of questions but maybe better to answer some of yours if you have any...
There are lots of local agencies that assist with this and I would definitely go to them first. Where do you live I might know who to point you to?
There's a lot of funding and grants available - you may not need to go to the bank for a lot of money. I would at least figure out what is available before going to the bank.
In terms of the "silent partner" its very hard to determine how much of a share anyone gets and what your work and effort are worth versus cash.... I'd think long and hard about that part before accepting it....
Lurgan...In fairness he's not caring, he has plenty and it's more of an interest to him but he just offered to help. I know what you're saying...why should i put all the hard work and effort into it for someone to sit back and get some of the rewards for no effort...My thoughts too
Quote from: illdecide on March 30, 2018, 05:02:26 PM
Lurgan...In fairness he's not caring, he has plenty and it's more of an interest to him but he just offered to help. I know what you're saying...why should i put all the hard work and effort into it for someone to sit back and get some of the rewards for no effort...My thoughts too
...because his capital will allow the business to grow and then the pie will be bigger. So your smaller percentage of the bigger pie may be more £ than owning 100% of the smaller pie.
So it really comes down to whether you need his capital, or you think that the capital will grow the business.
You'll need a business plan if you're looking a business loan or applying for any grants
Quote from: Dougal Maguire on March 30, 2018, 07:08:22 PM
You'll need a business plan if you're looking a business loan or applying for any grants
Agree totally with this, and don't rush into it, and some mightn't like this but don't trust many people
It is an existing established business where the owner is just getting on (and not in great health) and he just hasn't the energy for it anymore...
Was going to get into a business a while back (Christ, 5 years ago) did the whole business plan and was able to get a backer interested, as i was never able to get full amount..ended up I just worked out that for me I'd have had wage but no real ownership and yes, while I'd have close to half a business to sell on for retirement purposes I wasn't ready to do all the hard work for someone else!
But it's a nagging feeling, although I've a great job now and love my job it was something that I did very well in and would have improved it..
If you believe in it do it!
Find a job that you like and you'll never work a day in your life
Quote from: Dougal Maguire on March 30, 2018, 11:32:25 PM
Find a job that you like and you'll never work a day in your life
That too!
I look forward to trying your ice cream.
Quote from: illdecide on March 30, 2018, 05:02:26 PM
Lurgan...In fairness he's not caring, he has plenty and it's more of an interest to him but he just offered to help. I know what you're saying...why should i put all the hard work and effort into it for someone to sit back and get some of the rewards for no effort...My thoughts too
It would depend on the percentage of the business your silent partner would be looking to take. If it was a 50/50 or something close to that you'd be safer with a loan. It would be paid off in a few years and all the rewards would be your own.
There are plenty of grants available if you look in the right places for renovations etc.
I'd be exploring the silent partner route before speaking to the banks. It shouldn't be beyond your wit to work out a buy out arrangement with him now which will give him a good return on his capital provided you are successful. The banks will want their return no matter what and it won't just be the interest on whatever loan you manage to agree with them. You won't be able to shop around for everyday banking facilities or overdraft cover and all banks will charge extortionate rates for these once they have their hooks in. It would appear that he also has a bit of business savvy (or at least the ability to turn a pound) which can be a very useful resource for a bit of mentoring or even just for a second opinion.
Your biggest investment is going to be your time, whatever the opening hours of business are you can add half again for your involvement. Have you got the time and energy for that? All businesses are a risk no matter what past performance is, what's your fall back position if it doesn't work? How long can you work without a regular pay packet?
If you have an answer for these questions I say go for it. And do as much as you can without the banks. Mark Twain was right about them.
worth waiting until you have the capital to go it alone, no banks, no silent non working partners, you can get money slow or you can get it fast, we all know what happens when people get money fast
Right folks, things have moved on since last time. Fee's have been agreed verbally and all i need now is to come up with the money...(the hard part). Any advice on which banks are best for loans, TBH i'm not looking to borrow a massive amount of money (about £80k - £90k) but not sure where to even start. I have spoken with CIDO (look after small businesses) and they're going to do a business plan for free for me so suppose that's a start, I don't know what way to turn here...
I thought your starting point would be the local council and InvestNI.
Good luck.
Quote from: illdecide on May 25, 2018, 10:36:47 AM
Right folks, things have moved on since last time. Fee's have been agreed verbally and all i need now is to come up with the money...(the hard part). Any advice on which banks are best for loans, TBH i'm not looking to borrow a massive amount of money (about £80k - £90k) but not sure where to even start. I have spoken with CIDO (look after small businesses) and they're going to do a business plan for free for me so suppose that's a start, I don't know what way to turn here...
Is there any security available to the funders? I assume there is no property to use as security but are there any other assets? If the business has a decent trading history and the business plan can demonstrate that if is cash generative then the first place I would start is with the bank that the current owner uses. They will know the business well and have some confidence over its trading history. However, if you can demonstrate that it can service a loan i would speak to the other main banks. Shopping around on something like this could be worthwhile as they will be keen to get your business banking as a customer. They will all have small business experts who can advise you on their products.
Quick edit: The issue with loans of this size is that very often the main banks are quite similar in what they are prepared to "Offer". Deliverability and service oftern it is down to how good the local bank relationship managers are. Probably worthwhile asking around some people you know with similar businesses to see how they rate their local people on the ground.
Good luck
Quote from: illdecide on May 25, 2018, 10:36:47 AM
Right folks, things have moved on since last time. Fee's have been agreed verbally and all i need now is to come up with the money...(the hard part). Any advice on which banks are best for loans, TBH i'm not looking to borrow a massive amount of money (about £80k - £90k) but not sure where to even start. I have spoken with CIDO (look after small businesses) and they're going to do a business plan for free for me so suppose that's a start, I don't know what way to turn here...
Good luck chief. Hope all goes well for you!
Quote from: illdecide on May 25, 2018, 10:36:47 AM
Right folks, things have moved on since last time. Fee's have been agreed verbally and all i need now is to come up with the money...(the hard part). Any advice on which banks are best for loans, TBH i'm not looking to borrow a massive amount of money (about £80k - £90k) but not sure where to even start. I have spoken with CIDO (look after small businesses) and they're going to do a business plan for free for me so suppose that's a start, I don't know what way to turn here...
Get a look at the last few years accounts if you can. Cash flow, Profit and Loss and Balance Sheet.
Understanding the financial state of the business would be pretty important before talking to banks or investors imho
Quote from: laceer on May 25, 2018, 02:33:57 PM
Quote from: illdecide on May 25, 2018, 10:36:47 AM
Right folks, things have moved on since last time. Fee's have been agreed verbally and all i need now is to come up with the money...(the hard part). Any advice on which banks are best for loans, TBH i'm not looking to borrow a massive amount of money (about £80k - £90k) but not sure where to even start. I have spoken with CIDO (look after small businesses) and they're going to do a business plan for free for me so suppose that's a start, I don't know what way to turn here...
Get a look at the last few years accounts if you can. Cash flow, Profit and Loss and Balance Sheet.
Understanding the financial state of the business would be pretty important before talking to banks or investors imho
The problem you may have with a small owner operated business is that the "true" profitability may not be reflected in the accounts/tax returns which is all the banks/Investors will rely on for their covenants. So you may be in a position where you know that you will have no issue in making the loan repayments but will be unable to prove it!
That's true, but if I was going to a bank looking for £90k I'd want to make sure that I knew the accounts and the tax return inside out. If it's a limited company there'd have to be audited accounts though.
Quote from: laceer on May 25, 2018, 04:02:07 PM
That's true, but if I was going to a bank looking for £90k I'd want to make sure that I knew the accounts and the tax return inside out. If it's a limited company there'd have to be audited accounts though.
Totally agree. The point I was making was that even though he might know from speaking to the owner and knowing the business that it turnovers £100k per year and generates £50k per year "profit" that might be difficult to prove depending on the nature of the business. If the accounts and tax returns say that it only turns over £60k and makes £10k profit its the "official" figures that the bank will be able to take into account in making a credit assessment. I would imagine its below the audit exemption limit in any case, even if it is a limited company.
He can't be much of a businessman if he is asking the crowd on this site. Most of them idea of productivity is wearing their underpants inside out to get an extra few days out of them
save the cash before starting a business, yes its hard but if was easy everyone would do it. avoid the banks, they will rape you, unless of course you go bankrupt and dont pay it back which seems to be a worrying trend atm
Quote from: Avondhu star on May 25, 2018, 10:27:02 PM
He can't be much of a businessman if he is asking the crowd on this site. Most of them idea of productivity is wearing their underpants inside out to get an extra few days out of them
Is there anything wrong with asking advice from guys who possibly own their own business, you are offcourse correct if i was a business man i wouldn't be on here asking questions as i'd already know it all.
TabClear you are of course correct in saying that the accounts will not reflect the true turnover which is where i could be in trouble trying to borrow money. Of course i could borrow a bit less maybe £65k and try and put £15k of my own money in which will help.
Good luck with it anyway
I see quite a popular and what I thought was a successful business in north Louth has had to pull the plug after 25 years trading. Anyone know the story here?
No, but you can assume they geared up heavily on the business - any mortgage should have been paid off a long time ago. Probably borrowed to buy property! It isn't like they have done a whole lot recently to the property.i fear for the animals in the petting farm, and also for their suppliers who have probably not been paid for a while.
Interesting commentary on this NL business on social media today. When you separate the wheat from the chaff in FB land the questions that remained for me:
1. Where has the money been going - by all accounts the place rarely cooled?
2. How much (if any) is owed to suppliers?
Quote from: general_lee on May 29, 2018, 03:35:04 PM
I see quite a popular and what I thought was a successful business in north Louth has had to pull the plug after 25 years trading. Anyone know the story here?
Eddie Haughey isn't available to bail him out anymore, but it's a strange one alright. The place was packed out 6 nights a week, serving greasy over priced food to tourists and those who don't know any better, but in Danny's defence they kept coming back.
The banks finally pulled the plug this week, but he still managed to pull a few strokes before it all came down around him. A horrible little man who finally got his just desserts.
The stench outside the place was over powering at times, it is just down river from a sewage plant.
All we need now is fat Jimmy Cumiskey auctioning everything off to put the icing on that particular cake.
Jesus some people are hard to please. I have nothing but good things to say about the restaurant. Wouldn't have been a regular customer but u have been about 20 odd times over the years and it was always lovely food. Expensive enough grub all the same and it was always packed so it must be some debts external to the restaurant have messed things up.
The Halloween and Christmas decorations and displays were excellent.
Quote from: illdecide on May 26, 2018, 08:37:43 AM
TabClear you are of course correct in saying that the accounts will not reflect the true turnover which is where i could be in trouble trying to borrow money. Of course i could borrow a bit less maybe £65k and try and put £15k of my own money in which will help.
Did you look at P2P/crowd lending?
Heard good reports about Linked Finance, but that's only in the south I believe, and max loan term is 3 years. But there's probably multiple UK providers offering similar
Quote from: illdecide on May 26, 2018, 08:37:43 AM
TabClear you are of course correct in saying that the accounts will not reflect the true turnover which is where i could be in trouble trying to borrow money. Of course i could borrow a bit less maybe £65k and try and put £15k of my own money in which will help.
Fair play for taking the risk, hope it works out well for you
Edit: once you get opened up, throw up the name here for some free advertising, I'm sure the gaaboard community would do a bit to support you
OMG...got the accounts today for the last two years and he should be jailed FFS. I'm rocked here and it's put a real dampener on things as i just had a business plan done this morning and what is needed against whats currently being lifted is a major major concern...
Quote from: illdecide on May 31, 2018, 01:52:54 PM
OMG...got the accounts today for the last two years and he should be jailed FFS. I'm rocked here and it's put a real dampener on things as i just had a business plan done this morning and what is needed against whats currently being lifted is a major major concern...
Do you mean in terms of whats reflected in the accounts against what you know is the reality? If its a case that the business doesnt make as much as you thought when you agreed the price then your only option is to renegotiate or walk away.
However if its the "official versus actual" dilemma and he understands that you need to raise finance and understands how much cash you will actually generate you could think about doing a staged buyout with an option agreement. i.e. He wants £100k for his shares but because of the accounts you can only raise £70k. However you know (and he knows) that you will have at least another £30k coming in over the first 2 years so you pay him £70k now for 70% with an option to buy another 15% in 1 year for £15k and 15% in 2 years. If your business plan is correct you should generate the cash to pay him rather than a larger loan. (Albeit it may mean you have to pay him quicker than you would a bank i.e. 2 years rather than 5 say). Ideally you would want the option exercise to be at your discretion but he would be unlikely to go for that. If you had a investor who was willing to back you they might do a similar deal for the £30k (silent partner secured against the shares) depending on the return you offered.
There are tax efficient ways it could be structured from his side (vendor loan notes etc) that might appeal to him but this could get complex pretty quickly so you would need to take proper advice from a legal and tax perspective so it might not be worth the hassle.
Quote from: Ambrose on May 29, 2018, 10:56:19 PM
Quote from: general_lee on May 29, 2018, 03:35:04 PM
I see quite a popular and what I thought was a successful business in north Louth has had to pull the plug after 25 years trading. Anyone know the story here?
Eddie Haughey isn't available to bail him out anymore, but it's a strange one alright. The place was packed out 6 nights a week, serving greasy over priced food to tourists and those who don't know any better, but in Danny's defence they kept coming back.
The banks finally pulled the plug this week, but he still managed to pull a few strokes before it all came down around him. A horrible little man who finally got his just desserts.
The stench outside the place was over powering at times, it is just down river from a sewage plant.
All we need now is fat Jimmy Cumiskey auctioning everything off to put the icing on that particular cake.
No doubt you'll be delighted to hear that Danny appears to be back in business
Don't let the facts get in the way of your little story Dougie, like yourself Danny is a busted flush. He will now be washing dishes in a property he used to own ::) Back in business alright.
Fitzpatrick's Bar and Restaurant was bought for more than €2 million.
Talk of the Town confirmed last week that Northern Irish firm JDM Group had bought the Rockmarshall pub with the intention of re-opening it in the coming weeks.
It has now been confirmed by The Belfast Telegraph that the sale of the premises, which was forced to close its doors in May, has been completed for £1.8 million (€2,021,220).
The paper reports today that the businessman behind west Belfast's devenish venue, Jim Conlon, will be running the business when it reopens.
Mr Conlon, director of JDM Management, also owns Wolf and Whistle bar, The Rock Bar, GymCo, Pizza Co and The Chip Co, as well as a nightclub in Glasgow.
JDM chef Carl Johannsson has taken to Facebook in recent weeks to recruit new chefs for the restaurant.
Fitzpatrick's, which had been run by Danny and Dympna Fitzpatrick since 1993, closed its doors suddenly on May 31st on the instructions of Bank of Ireland.
The property was then placed on the market through local estate agents Sherry FitzGerald Carroll in June with an asking price of €1.5 million.
The Belfast Telegraph article, which can be read here, confirms what Talk of the Town reported last week that former owner Danny Fitzpatrick will still be involved in the day to day operation of Fitzpatrick's.
https://www.talkofthetown.ie/fitzpatricks-bar-and-restaurant-sold-for-just-over-e2m/
Quote from: general_lee on May 29, 2018, 03:35:04 PM
I see quite a popular and what I thought was a successful business in north Louth has had to pull the plug after 25 years trading. Anyone know the story here?
Word on the street, and I emphasise rumour and innuendo, was he was unable to tell the revenue how many staff he had and a second set f books were discovered on premises.
Quote from: Ambrose on July 31, 2018, 01:25:28 PM
Don't let the facts get in the way of your little story Dougie, like yourself Danny is a busted flush. He will now be washing dishes in a property he used to own ::) Back in business alright.
Fitzpatrick's Bar and Restaurant was bought for more than €2 million.
Talk of the Town confirmed last week that Northern Irish firm JDM Group had bought the Rockmarshall pub with the intention of re-opening it in the coming weeks.
It has now been confirmed by The Belfast Telegraph that the sale of the premises, which was forced to close its doors in May, has been completed for £1.8 million (€2,021,220).
The paper reports today that the businessman behind west Belfast's devenish venue, Jim Conlon, will be running the business when it reopens.
Mr Conlon, director of JDM Management, also owns Wolf and Whistle bar, The Rock Bar, GymCo, Pizza Co and The Chip Co, as well as a nightclub in Glasgow.
JDM chef Carl Johannsson has taken to Facebook in recent weeks to recruit new chefs for the restaurant.
Fitzpatrick's, which had been run by Danny and Dympna Fitzpatrick since 1993, closed its doors suddenly on May 31st on the instructions of Bank of Ireland.
The property was then placed on the market through local estate agents Sherry FitzGerald Carroll in June with an asking price of €1.5 million.
The Belfast Telegraph article, which can be read here, confirms what Talk of the Town reported last week that former owner Danny Fitzpatrick will still be involved in the day to day operation of Fitzpatrick's.
https://www.talkofthetown.ie/fitzpatricks-bar-and-restaurant-sold-for-just-over-e2m/
So I take it the 5ive Times' won't be paying a visit anytime soon