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Fresh Threads: Events, rolling contracts, retail units, running two businesses in one

  1. Ray Newman

    Ray Newman UKBF Regular Staff Member

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    Hi UKBFers,

    Welcome to Fresh Threads, our weekly roundup of the most popular threads, comments and advice from the forums.

    Here are my top picks from the past week.

    1. Is it a good idea to invest money in event management businesses?

    Khawar Jordan
    Is it a good idea to invest money in event management businesses in London? Please give me your opinions.

    Socio South West: As long as the events are either for less than six people or in a COVID-managed situation there's no reason not to go for it.... but I'm not sure there will be much of a target market just at the moment.

    The Byre: Two London events companies went bust this week. The few remaining are beginning to lose contracts now for 2021. The business might be back to normal by 2022 – that hardly sounds like an opportunity to me!

    Alison Moore: It definitely is not the right time to be investing in event management. Who knows how long these restrictions will go on for.

    Paulears: I organise and manage events and my diary cleared in March in just three days, the entire year's work evaporated. Events are dead, and as The Byre says, even early 2021 bookings that remained on the books are now starting to cancel.

    2. Advice on rolling contracts

    Nicola Meekin
    I feel I have been ripped off by a company providing HR services. I signed a three-year contract which ended in March 2020. Because I didn't cancel with 90 days’ notice, they have rolled me on for another 12 months. Are they obliged to send a reminder that this cancellation period is coming up? 

    Newchodge: Their contracts with clients are usually the best of their drafted contracts – notoriously hard to get out of. You need to read the fine print. Have they fulfilled their part of the contract? Telling them that you will be screaming about failure to provide proper services may persuade them to allow you to go early.

    Mr D: Send a reminder? No, they aren't obliged to. After all, if you wanted to cancel you'd have done so as per the contract. They cannot even force you to read what you signed.

    Chris Ashdown: Afraid it's just a lesson in reading a contract fully before you sign. To most people it only happens once in a lifetime, including myself. If the salesperson is in a hurry or the offer ends the next day there is a need to read the contract fully at least twice.

    Mark T Jones: You say ripped off, the law says voluntarily entered into a contract whilst choosing not to read T&Cs. Unless you have compelling evidence of mis-selling?

    3. Things to ask when looking at a retail unit

    This week I should be looking at viewing my first unit for a barber shop. I was just wondering if anyone could give me any advice on what questions I need to ask. Also, is there any funding or loans I can look into?

    Alison Moore: It depends on the lease, but a lot of commercial properties are fully repaired, so you're totally responsible for it throughout the term of the lease. A lot are long leases too, so make sure there are break clauses. Definitely get legal advice on it though.

    consultant: Make sure you prepare a basic business plan before you do anything, especially to understand the numbers. Always include your wages in the costs. Count the number of clients the closest competitor has in a similar location on a slow day. Use that as the basis for your footfall/conversion rate. Calculate turnover from this. If it’s more than your costs, you have somewhere to start.

    MBE2017: OP might wish to read a few threads where other barbers are suffering very badly at the moment, maybe permanently. One to find out yourself, not ask, is the true footfall. Ignore what anyone tells you, sit outside and start counting for a week.

    James Johnson: Get the option to leave at the end of every 12 months with two months notice. Seriously.

    4. Two businesses in one?

    If you have a limited company that for instance does printing services, can you also run a totally different business model within the same business? I’m looking to possibly do camper conversions. 

    Jass T: I think you can run both businesses under one limited company. But most people would separate them for accounting and liability purposes. If your new business starts losing money you don't want it to drag your other business down with it.

    Scalloway: You can run two businesses from one limited company. You need to set up your accounting system so that the income and expenses for each one is shown separately for corporation tax.

    Maxwell83: I was in a similar predicament when starting a new business but wanted total separation so set up a new limited company. I loaned a new company the money from the old company, interest free, with the help of my accountant, so I still got to use the old company’s surplus cash without having to personally withdraw it. The new company just repaid the loan when it was profitable.

    That's all for this week – have a great run into the weekend!