Advice for the future of my company

Discussion in 'General Business Forum' started by PCLTD, Jul 9, 2019.

  1. PCLTD

    PCLTD UKBF Contributor Free Member

    32 4
    Sorry I should have made it clearer.

    So the purchase price (with negotiation) would be around £37,500.
    On most commercial BTL you need a minimum purchase price of £50,000 so a standard mortgage would be unlikely/unfavourable. The only way I could buy that unit would be to put down a similar deposit (25%) and then get a loan for the remaining. The only problem is that loan for the unit might affect my future residential BTL. It might be possible but I would need to look carefully through it.

    I do like your idea though, I think this is kind of what I had in my head but worded it as a 'franchise'. For me it would be ideal if I could input and manage the online side of things while someone else runs the shop and we build the company as a whole. As you said it gives me more time but still a wage and foot in the company.

    Not something I have looked in to but if I went down that route would the new person become a director? I cant see someone wanting to do the above for just a profit share when its going to be slightly unknown for the foreseeable while we get a shop up and running.
    Also if someone did the above would they 'buy in' to the company or could I ask them to fund the shop, fitting etc as a buy in?

    Sorry if this sounds daft but its completely new to me. If you or anyone you know has done a similar thing I am happy to pay for your time and have a chat to run through a scenario on how it would work.

    Thanks again
     
    Posted: Jul 10, 2019 By: PCLTD Member since: Aug 3, 2018
    #21
  2. BusterBloodvessel

    BusterBloodvessel UKBF Regular Free Member

    157 59
    I work in the automotive industry and a lot of independent car parts & spares retailers now deal in cycles also. It's a strange direction but Halfords started it and everyone else has followed suit! That said it works well for every retailer I know that does it, it's now a big chunk of their income.

    How about approaching a local car spares shop, if you have one, and looking to sublet a small corner of their shop and operate as "Your Name @ Their Name" ("The Cycle Centre @ Jims Car Parts" sort of thing).

    You could then I think consider different ways of making it work for you which could be ;

    1. You instantly have your click and collect point.

    2. You use it as a "full" showroom with all your high end stock etc and either you are there or you staff it with somebody else. However one advantage could be that you could open less hours than the shop itself if it as run as a shop within a shop.

    3. You could have it as a more basic spares centre for regular maintenance / add on stuff (I guess that's tyres, inner tubes, helmets, water bottles etc?). You could staff this with a low paid worker OR the car parts shop could simply cover this for you with some training on these presumably simpler products?

    4. You could be available by appointment only for people wanting to spec up and view the serious high end stuff.

    Or some combination of the above to make it work for you.

    I am thinking that would get you the retail presence you need in a fully open store 6 or 7 days a week, keeping you access to your suppliers. The retailer you sublet from gets a little extra income and they benefit from extra footfall, AND potentially extra sales for them if you run it some way like in point 3 where they take care of the sales and take a commission.

    Just a thought...
     
    Posted: Jul 10, 2019 By: BusterBloodvessel Member since: Jan 22, 2018
    #22
  3. BTON Agency

    BTON Agency UKBF Regular Free Member

    143 24
    Can you not game the system, get the cheapest shop front you can, load the window with branding for your website and just not staff it?
     
    Posted: Jul 10, 2019 By: BTON Agency Member since: Aug 19, 2014
    #23
  4. ComPropSolicitor

    ComPropSolicitor UKBF Regular Free Member

    184 29
    Unless I am very mistaken, (1) your are being held back by not having a premises, (2) you have a portfolio of properties. Surely the solution is to buy a small shop that you can rent out if this does ever go wrong or sell. In the interim you can trade from it and suspect you would only have to employ one or two people.

    If you are turning over 400k and don't have profits to pay for some staff to run a shop something is going wrong somewhere.
     
    Posted: Jul 10, 2019 By: ComPropSolicitor Member since: Feb 1, 2019
    #24
  5. PCLTD

    PCLTD UKBF Contributor Free Member

    32 4
    I have seen a few car parts companies doing this online (mainly ads on Facebook) and they seem to stock e-bikes which are a strong market and gradually taking over. I guess although it's a 'bicycle' the motor aspect of it kind of works with their market. We are lucky as we are on elite + pricing with one retailer who also distribute two of the most popular brand e-bikes (this covers e-mountainbike, road and city) so if someone wanted to go down that route they have a very strong start. You can also then offer the Cycle 2 Work scheme which will help.

    In terms of buying a shop and then leaving it unmanned wouldn't really work. A lot of the suppliers have reps in the area so to set up an account they often come in the shop and talk face to face. It would mean having to do out a shop, add a workshop area, carpeting etc etc then just leave it. It would also run the risk of theft as people will eventually click on its not manned but holds a load of high end bikes. I have no problem investing in a shop front as a investment like any other property but it would have to be the right one.

    Regarding an employee, I can afford to pay someone but its wasted money and I dont have the time to be there all hours which I think eventually will look unprofessional if people see a shop front and visit a few times but its always shut, I can only see that heading to bad reviews.
    I pay my self a good wage from this company and my fiance works with me, as everything is online I imagine the shop will rarely get used which means I am paying someone to stand about all day in the hope the odd customer walks in and buys or wants to collect.

    It's a tricky situation to be in and I appreciate all the feedback. Hopefully I can get my head around all ideas and put a plan in place.
     
    Posted: Jul 10, 2019 By: PCLTD Member since: Aug 3, 2018
    #25
  6. JamieM

    JamieM UKBF Ace Free Member

    2,285 344
    How much of your sales are attributed to this one supplier? Is it a one brand supplier?
     
    Posted: Jul 10, 2019 By: JamieM Member since: Mar 22, 2006
    #26
  7. Socio South West

    Socio South West UKBF Enthusiast Free Member

    870 214
    As @Clinton is out... It doesn't matter a tinker's toss what a broker says a business is worth: Very often tending towards always their multiplication factors on Gross Profit result in wildly over inflated asking prices.

    A business is worth what someone will pay for it: A competitor is always a good way to dispose of a business as there are always those looking to expand: You may find a cycle shop who is looking to develop an online presence.

    The problem is you have a delightful pair of rose tinted specs on and you are asking someone to invest in the 'potential' - The business has the potential to crash and burn as much as it does to soar as you are envisaging: Your buyer is investing in risk..... and you are already admitting that suppliers are inspecting their own posteriors with ever increasing frequency.

    Cycling is a buzz word and a well grown bubble at the moment- Where was it 15 years ago? Where will it be in 15 years time? It would be a good time to market the business certainly, and you might be surprised how nice it feels to have some free time again.

    Think about the ease with which an online business can be set up - really all you are selling is your online presence plus the advantage of having the Google spiders crawling all over your site for a few years +SAV
     
    Posted: Jul 11, 2019 By: Socio South West Member since: Mar 24, 2013
    #27
  8. Pish_Pash

    Pish_Pash UKBF Ace Free Member

    2,413 621
    It looks to me that you' have the problem that most other business of this size have when they wish to exit ....too small to be of acquiring interest to the big players ...and a likely asking price too large for most entrepreneurial one man bands (who'd be your target buyer market). Also, you have no USP (no brand) to make yours of special interest ...in essence you're an online retailer...like any other online retailer (and there are hundreds of thousands of those)

    If you remove yourself from the business...there probably isn't much of a business left ...in other words you are the business.

    In your opening post, you mention tunrover...in isolation, it means squat...what's your net profit?
     
    Posted: Jul 11, 2019 By: Pish_Pash Member since: Feb 1, 2013
    #28
  9. MBE2017

    MBE2017 UKBF Ace Free Member

    1,074 281
    A few years ago I was given the same attitude by lighting suppliers, only happy to supply B&M shops, to avoid internet only companies undercutting the B&M’s.

    I went to the largest show and managed to get to talk to the various sales directors, and proved to them how the only people cutting their prices on the web, were their current B&M shops.

    End result I walked out of the exhibition with three new accounts opened up, the first e-commerce only account those companies had. I simply argued it was going to happen and they could either embrace the change, or die.

    Maybe you should try to argue your case a bit harder, I doubt they will want to lose the orders, and who knows how good a replacement supplier might be in the long run.

    Best of luck.
     
    Posted: Jul 11, 2019 By: MBE2017 Member since: Feb 16, 2017
    #29
  10. Mr D

    Mr D UKBF Legend Free Member

    16,847 1,886
    Some of the big name brands in other areas of business still argue that they won't devalue the brand by letting internet-only sellers trade.
    A number won't touch ebay & amazon now. Sell on there and they get onto the sites and have the account pulled.
     
    Posted: Jul 11, 2019 By: Mr D Member since: Feb 12, 2017
    #30
  11. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Big Shot Full Member

    4,350 875
    Ebay & Amazon (only) sellers are different to bona fide online sellers with their own website and who are not involved with selling their brand (or other brands) on these 2 platforms.

    Whether they are losing out by not selling on Amazon, is a different matter.
     
    Posted: Jul 12, 2019 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #31
  12. Mr D

    Mr D UKBF Legend Free Member

    16,847 1,886
    We are still online only sellers. Just we use a particular site.
    If someone is going to compete with the offline stores, undercut, devalue etc they can do so just with their own website too.
    The policy of the internet business is the issue in behaviour, not the particular site they happen to sell on.
     
    Posted: Jul 12, 2019 By: Mr D Member since: Feb 12, 2017
    #32
  13. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Big Shot Full Member

    4,350 875
    There is a distinct difference.

    Having your own website shows the supplier your company full details, about your company, products sold, price points and generally your overall business concept.

    A seller on eBay, Amazon etc can be a 'seller of all things' and just looking to make a profit and move on to another line or product as and when it suits them.

    The above 2 are very different business categories.

    I agree that some online sellers who have their own website also sell on Amazon etc, but they will generally be protecting their prices as much as possible and will not get involved with 'the race to the bottom'.

    Suppliers will not want to sell to the latter due to their (probable) business ethics.
     
    Posted: Jul 12, 2019 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #33
  14. Mr D

    Mr D UKBF Legend Free Member

    16,847 1,886
    As a seller of all things I think I know what I am about, thank you. We can also sell on our own websites that way. The business determines what it does, not the 3rd party site.

    Have had websites while also selling on ebay and amazon. Business was the same on all sites.
    Quite a number of online sellers have both 3rd party sites and own website for selling. Its been pretty common for well over a decade now.

    Protect your prices, don't protect your prices. Same decision making process whether competing with other sellers on a site or other sellers on other sites.

    I want to sell a £5 item on my own site that is also available cheaper on 3 or 4 third party sites and dozens of other seller websites at various prices then I have competition. Decisions on how to sell do not rely on what other sites exist.
     
    Posted: Jul 12, 2019 By: Mr D Member since: Feb 12, 2017
    #34
  15. tony84

    tony84 UKBF Big Shot Free Member

    5,570 985
    Why not buy a shop with a 1-3 year lease left on it?
    Put a sign up and then tell the wholesalers you have a shop. Once you have accounts with them are they really going to check up on you? Open it for a couple of months, if it is not paying for itself, close it down.
     
    Posted: Jul 12, 2019 By: tony84 Member since: Apr 14, 2008
    #35
  16. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Big Shot Full Member

    4,350 875
    It's good we have slightly different views. . . . . .it makes for interesting debate!
     
    Posted: Jul 12, 2019 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #36
  17. Financial-Modeller

    Financial-Modeller UKBF Regular Full Member

    404 113
    Thanks - now I understand.

    I think there are two separate and distinct issues here.
    1. disposal of your company
    2. future residential BTL investment

    Your post suggests that the latter is dependent on the former, but as many on here have suggested, the value of the former may not (given the info provided) be sufficient for the latter.


    So perhaps postpone the resi BTL idea, whilst you wind down the stake in the business AND retain the income from the shop unit.


    Anything is possible, subject to negotiation.


    Not sure that I can add significant value over and above what I've suggested, but happy for you to PM me to discuss privately in more detail. My post yesterday in the Marketplace on here might be of interest - no charge! :)


    You're welcome.
     
    Posted: Jul 12, 2019 By: Financial-Modeller Member since: Jul 3, 2012
    #37
  18. MarkHenry19

    MarkHenry19 UKBF Newcomer Free Member

    19 2
    Helpful stuff!
     
    Posted: Jul 14, 2019 By: MarkHenry19 Member since: Jul 13, 2019
    #38