Running/owning a small business

Orior · May 25, 2018, 10:46:35 AM

I thought your starting point would be the local council and InvestNI.

Good luck.

TabClear · May 25, 2018, 11:20:32 AM

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

lurganblue · May 25, 2018, 12:10:20 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...

Good luck chief. Hope all goes well for you!

laceer · 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

TabClear · May 25, 2018, 03:07:47 PM

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!

laceer · 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.

TabClear · May 25, 2018, 04:11:55 PM

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.

Avondhu star · 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

Mikhail Prokhorov · May 25, 2018, 11:24:48 PM

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

illdecide · May 26, 2018, 08:29:45 AM

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.

illdecide · 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.

laceer · May 26, 2018, 10:47:24 AM

Good luck with it anyway

general_lee · 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?

Rois · May 29, 2018, 10:26:49 PM

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.

Puckoon · May 29, 2018, 10:31:53 PM

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?