Is this a really stupid time to start this??
- Thread starter mpen
- Start date
- Original Poster
- #42
Well I increased my offer for the bakery and so far I have heared nothing back, to me that is a good sign, I think it means my offer is being considered rather than a flat refusal.
I had an email from 'my business manager' at 11.45 pm asking for 12 months bank statements and the books from the bakery I was buying, a strange request as I'm not going to run it soley as a bakery and I made it clear it had not traded for nearly 2 years, I thought I was just buying a property, I emailed straight back to get an auto responded email to tell me she was now on leave and would be back on 27th of April, what the hell am I suppose to do for the next 3 weeks, I thought it was going to smoothly.
I had an email from 'my business manager' at 11.45 pm asking for 12 months bank statements and the books from the bakery I was buying, a strange request as I'm not going to run it soley as a bakery and I made it clear it had not traded for nearly 2 years, I thought I was just buying a property, I emailed straight back to get an auto responded email to tell me she was now on leave and would be back on 27th of April, what the hell am I suppose to do for the next 3 weeks, I thought it was going to smoothly.
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- Original Poster
- #43
Well I had my second offer of 180k refused, but my last offer of 185k was accepted late this afternoon so thats good, the bad bit.
After a promising start with Natwest, it seems that there is only one person that can make the decision about lending the amount I want to borrow, I've been promised a call back today, but suprise suprise nobody did. seems a very strange way to conduct business.
still its only 7.30 pm I had one email at 11.45 pm last week....
After a promising start with Natwest, it seems that there is only one person that can make the decision about lending the amount I want to borrow, I've been promised a call back today, but suprise suprise nobody did. seems a very strange way to conduct business.
still its only 7.30 pm I had one email at 11.45 pm last week....
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- Original Poster
- #44
Well it's nearly d-day for the yes or no on my finance, I must say when my business manager came back from her holidays she was very helpful, and very very though, asking questions I'd never even thought of.
She said my proposals looked good and it was a good application, it's taken dozens of emails, 10 phone calls, a personal profile,profiles of the staff I want to employ, total breakdown of the business, many forms, bank statements the list goes on...............so it's fingers crossed....even if it fails I will try another bank
She said my proposals looked good and it was a good application, it's taken dozens of emails, 10 phone calls, a personal profile,profiles of the staff I want to employ, total breakdown of the business, many forms, bank statements the list goes on...............so it's fingers crossed....even if it fails I will try another bank
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B
Beachcomber
Just seen this thread for the first time. Got to be honest - it looks like an excellent opportunity and you seem to have covered all the main points.
If your bank mess you about, go elsewhere. Someone somewhere is bound to offer you the financing as there is plenty of collateral (business premisis an your house)
Good luck with this - expect plenty of stress, headaches and panics - these things always have a habit of throwing unforseen situations at you - keep focused on your long term plan and you'll be fine.
One thing I would say - if you have a partner / wife, always make sure you take the time to keep her (or him, never know!) 100% in the loop and make time for them. It's easy for a partner to feel left on the sidelines and useless in these situations and with all the desicions to make and work to do it can be easy to take them for granted.
If your bank mess you about, go elsewhere. Someone somewhere is bound to offer you the financing as there is plenty of collateral (business premisis an your house)
Good luck with this - expect plenty of stress, headaches and panics - these things always have a habit of throwing unforseen situations at you - keep focused on your long term plan and you'll be fine.
One thing I would say - if you have a partner / wife, always make sure you take the time to keep her (or him, never know!) 100% in the loop and make time for them. It's easy for a partner to feel left on the sidelines and useless in these situations and with all the desicions to make and work to do it can be easy to take them for granted.
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J
JADEMEDIA
OP. There is one thing that everyone seems to have overlooked. Any funding that you get from the bank or whoever will be subject to the lenders valution and given today's more cautious approach that is going to be pretty conservative. This means that you may have to pay a bigger disposit than you thought.
Now you may well have accounted for that but don't forget that a formal valuation togther with a detailed survey on the cost of those repairs could give you valuable ammunition to re-nogociate the price and it does see pretty high considering the avergage drop in prices these last 2 years.
And finally I would mention one other thing. It is so so easy to get carried away with a project and in doing so develope tunnel vision and by that I mean focus soley on this particular property. It might be worth standing back for week and looking at other possible alternatives. You might find that there is even better value on the market.
Jade.
Now you may well have accounted for that but don't forget that a formal valuation togther with a detailed survey on the cost of those repairs could give you valuable ammunition to re-nogociate the price and it does see pretty high considering the avergage drop in prices these last 2 years.
And finally I would mention one other thing. It is so so easy to get carried away with a project and in doing so develope tunnel vision and by that I mean focus soley on this particular property. It might be worth standing back for week and looking at other possible alternatives. You might find that there is even better value on the market.
Jade.
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A
adam
It all looks very good and I wish you luck.
My only word of caution would be about keeping your existing job. No one has your interests at heart as much as you do and with staff letting you down etc I would want to have that covered.
Otherwise let me know if you want a coffee machine in the shop for selling to customers and I will see what I can do for you.
My only word of caution would be about keeping your existing job. No one has your interests at heart as much as you do and with staff letting you down etc I would want to have that covered.
Otherwise let me know if you want a coffee machine in the shop for selling to customers and I will see what I can do for you.
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- Original Poster
- #50
I can take a few weeks off for the opening/set up, I would be silly to leave my reasonably well paid job to start with, it would just put to much pressure on a new business to draw that kind of salary, I am confident I am putting the right people around me, many of them have worked with me for many years, I have looked after them in the past and alway looked after them and paid them fairly.
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J
JADEMEDIA
One thing comes across in all this now Mpen. At £45K a year you must be an extremely succesful chef and a nice guy that is respected in the trade. That in itself will bring business in whatever you do and there is an opportunity there.
There are some 45,000 members in this forum. A considrable following if you were to publish a book someday. In the meantime how about some simple but easy receipes that busy business folk can re-produce reliably. I can't count the number of times I have tried to produce a decent Steak Diane and yet I have tried everything fron braising through sirloin and rump to fillet and rib eye steak.
Anyway. Best of luck with the bakers. Bread in the supermarket sucks after it is a couple of hours old. Jade
There are some 45,000 members in this forum. A considrable following if you were to publish a book someday. In the meantime how about some simple but easy receipes that busy business folk can re-produce reliably. I can't count the number of times I have tried to produce a decent Steak Diane and yet I have tried everything fron braising through sirloin and rump to fillet and rib eye steak.
Anyway. Best of luck with the bakers. Bread in the supermarket sucks after it is a couple of hours old. Jade
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- Original Poster
- #54
oky doky
Steak Diane
I prefer to use fillet for this, try and use your local butcher and ask for an aged fillet steak, you want it fully trimmed so all you have is pure meat nothing else, if your going to use a supermarket fillet always remove it from the packaging a couple of hours before you use it, never choose meat thats bright red, it looks nicer but it's too fresh you want something with a bit of age in it.
for two people you will need
4 slices of quality fillet steak about half an inch thick (each steak)
I small crushed clove of garlic (optional)
2 finely diced banana shallots or half a diced white onion
4/5 sliced med mushrooms
dessert spoon of chopped parsley
1 large tomato, skinned and seeded (put a cross on the top and bottom di in boiling water for around 30 seconds, then under cold water, the skin will come off easier)
unsalted butter
olive oil
shot of brandy
bottle of good red wine at room temp ( save one glass for the steak diane enjoy the rest whilst your cooking)
dijon mustard
whipping or double cream
thick bottomed saute pan
make sure the fillets are dry, season
heat the pan, dessert spoon of olive oil small knob of butter, fry the steaks around 1 min per side, don't let the pan get to hot or the butter will burn, take the steaks out put on warm plate and cover, not hot plates or the steaks will keep cooking,
add the diced shallot and garlic, dont colour cook until transparent,add mushrooms cook out brandy in flambe to remove the alcohol, add red wine, reduce down by half, add tomato, parsley and cream, about a cupful, reduce down until sauce thickens add dijon mustard and season to taste
pour blood and juices into sauce bring to simmer, switch off, put the steaks into the sauce and cover for around 2 mins to warm.
enjoy
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I think this sounds excellent, my kind of investment!
It's hard to work out all the figures (with the numbers given), but with your full-time employment it seems quite easy - with the sandwich shop (eventually being some plush restaurant when you retire!) being the cherry on top?
I think half the board would jump at this opportunity, and with your experience it sounds excellent. Do your "worst case" figures, and if it still works, go for it.
sounds like a winner
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Hi,
there's nothing called a 'really stupid time' for starting something!
i have gone through your post 2 times, and i really can not find anything stupid about your thought process. you seem to be very clear about what your options are all about. and you seem to have already done your homework. so far, so good.
however, there's just one issue. you seem to be staking everything that you own, on this venture. nothing wrong in that approach too, if you are sure about the viability of your business model.
nevertheless, it'd be advisable to do a little 'deep digging' about the antecedents of the seller. every seller has a primary motivation to sell off his business (which often he keeps to himself), and a set of secondary motivations (which he releases for public consumption). as a prospective buyer, if you could get at the primary motivation, you may get a little more bargaining power at your hands. also, a seller, invariably indulges in some sprucing up/dressing up, before placing the business in the selling block. if you could do a little background digging and get some idea about the level of dressing up that the business has undergone, that will provide you some additional bargaining power.
you have already set your limit at 160 k anyway. and you seem to have, more or less made up your mind that you want to buy this business. so, the bottom line, essentially is can you bargain and save a few k's.
all the best.
sekhar
there's nothing called a 'really stupid time' for starting something!
i have gone through your post 2 times, and i really can not find anything stupid about your thought process. you seem to be very clear about what your options are all about. and you seem to have already done your homework. so far, so good.
however, there's just one issue. you seem to be staking everything that you own, on this venture. nothing wrong in that approach too, if you are sure about the viability of your business model.
nevertheless, it'd be advisable to do a little 'deep digging' about the antecedents of the seller. every seller has a primary motivation to sell off his business (which often he keeps to himself), and a set of secondary motivations (which he releases for public consumption). as a prospective buyer, if you could get at the primary motivation, you may get a little more bargaining power at your hands. also, a seller, invariably indulges in some sprucing up/dressing up, before placing the business in the selling block. if you could do a little background digging and get some idea about the level of dressing up that the business has undergone, that will provide you some additional bargaining power.
you have already set your limit at 160 k anyway. and you seem to have, more or less made up your mind that you want to buy this business. so, the bottom line, essentially is can you bargain and save a few k's.
all the best.
sekhar
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J
JADEMEDIA
Sekhar
The OP stated at the beginning that the shop was up for sale because one partner had died and the other retired. I doubt that there is any untoward motive then for disposing of the premises. There was also a remark that the shop was in a 'good area' so there is a good chance that property values may bounce back.
The bottom line is that Mpen has shown what many new business start-up fail to do and that is called due diligence and as such any success he enjoys could hardly be described as good luck but down to good old fashioned business acumen. Pity our new breed of business bank managers don't have a clue what that means.
Enough said I think and thanks Mpen for the recipe. Jade
The OP stated at the beginning that the shop was up for sale because one partner had died and the other retired. I doubt that there is any untoward motive then for disposing of the premises. There was also a remark that the shop was in a 'good area' so there is a good chance that property values may bounce back.
The bottom line is that Mpen has shown what many new business start-up fail to do and that is called due diligence and as such any success he enjoys could hardly be described as good luck but down to good old fashioned business acumen. Pity our new breed of business bank managers don't have a clue what that means.
Enough said I think and thanks Mpen for the recipe. Jade
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Jade
Due dilligence is checking all you can for yourself, not just a matter of taking someones word for an answer, people can be really deveouse when they need to sell something, the neigbours could be the devil or simular, the passing trade may have changed since it was last used or plans to re-route traffic around that area
All insite was saying was check and then check again, its probably all as said but money is hard to come by these days
Due dilligence is checking all you can for yourself, not just a matter of taking someones word for an answer, people can be really deveouse when they need to sell something, the neigbours could be the devil or simular, the passing trade may have changed since it was last used or plans to re-route traffic around that area
All insite was saying was check and then check again, its probably all as said but money is hard to come by these days
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- Original Poster
- #65
Well I started down this path on the friday 13th of march, that must say it all.
After a rocky start and my newly appointed business manager going on holiday for 20 days and my application being put on hold all that time,
I was told I would have an answer for my loan on Tuesday last week, then Wednesday, then Friday, then Monday, then I was told the file wasn't sent 'upstairs' for approval until this morning and they would call me this afternoon.
Guess what.............still no call..........I hope if this project goes wrong (if I ever manage to get finance) RBS are as crap at collecting money as they are giving it out.
After a rocky start and my newly appointed business manager going on holiday for 20 days and my application being put on hold all that time,
I was told I would have an answer for my loan on Tuesday last week, then Wednesday, then Friday, then Monday, then I was told the file wasn't sent 'upstairs' for approval until this morning and they would call me this afternoon.
Guess what.............still no call..........I hope if this project goes wrong (if I ever manage to get finance) RBS are as crap at collecting money as they are giving it out.
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Just jumped in on the thread there, wish you all the best.
I wish my Dad would have had the drive to give it a go to have a business alongside his fulltime job or some sort of business running. He has always wanted to but never found the time, so i'll just need to do it for him.. he prefers to keep his money in his mattress.
Hopefully you hear from the bank soon, maybe its worth a shot at trying to contact another bank as a back up solution incase Natwest just keep running rings and dont get back to you with a firm answer so you have a few routes to take for the property.
Seems there are alot of bargains around recently.. found some great properties that would suit my business (quite hard to find property to rent) if i could only find the deposit.
Looks like you have thought the plan through well and should be able to get the money from somewhere, seems like there is a few income routes that should cover you even if one part of the 4 is a sticking point for you filling the space.. if you get some lease in place for each person for each space then you will be onto a winner.
Keep us updated, its good to read someones business starting or development through and each stage... UKBF should sort out something with people doing it to do a Diary feature occasionally.
I wish my Dad would have had the drive to give it a go to have a business alongside his fulltime job or some sort of business running. He has always wanted to but never found the time, so i'll just need to do it for him.. he prefers to keep his money in his mattress.
Hopefully you hear from the bank soon, maybe its worth a shot at trying to contact another bank as a back up solution incase Natwest just keep running rings and dont get back to you with a firm answer so you have a few routes to take for the property.
Seems there are alot of bargains around recently.. found some great properties that would suit my business (quite hard to find property to rent) if i could only find the deposit.
Looks like you have thought the plan through well and should be able to get the money from somewhere, seems like there is a few income routes that should cover you even if one part of the 4 is a sticking point for you filling the space.. if you get some lease in place for each person for each space then you will be onto a winner.
Keep us updated, its good to read someones business starting or development through and each stage... UKBF should sort out something with people doing it to do a Diary feature occasionally.
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- Original Poster
- #67
Well at last I finally got some kind of offer, still got strings attached but the best they are going to do is 60% LTV which I feel is a little harsh, but they won't move, I get the distinced impression thay all they are trying to do is cover their own arses. When I did my profit and loss accounts I did on low trading figures and they still panned out ok they want me re-submit it showning better takings. think I will start to have a look elswhere anybody recommend a bank that wants business?
On another note I called alliance-leicester today to talk to business banking about a mortgage, I was asked for my number and told I would be contacted in 4 days, four hours I said, no four days forget it I said......fantastic service
On another note I called alliance-leicester today to talk to business banking about a mortgage, I was asked for my number and told I would be contacted in 4 days, four hours I said, no four days forget it I said......fantastic service
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Welcome to the world of bankers! They only ever want to see margin for the sake of margin, thats about as far as their black and white paper bound view of business takes them. What can you expect though? Since the age of 4 they have sat at one desk or another and pushed numbers around.
You are absolutely right they have no interest at the moment in 'backing a good horse' they only want you to build in margins for error so great that their risk is negated altogether. They know that if you fail dramatically in the first 12 months and miss every single repayment you still won't have wiped out 60% of the property value. They carry no risk, but they want to charge you for the loan anyway. Great huh?
Have you tried looking for an investor who is keen to get some money into property? You may be able to find someone happy to part fund the property on the condition you both sell up in 5 years or if the business is doing well you remortgage and buy his share out.
Lets face it if the value of the property is lower in five years time the economy will be so screwed its not even worth planning for. This would be a logical and cheaper way forward with the right investor.
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Thats Banks for you, Prefer you inflate the business plan and make a mockery of the work thats gone into it, rather than look at a well thought out set of numbers
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- Original Poster
- #74
Well a big day today,,,,,after being told to start with I needed 70/75k as my input, this went up to 99k yesterday afternoon, I had a good think about and thought ok, so I called this morning to confirm that nothing else was needed, it was a done deal to be told emmmmm we have made a mistake we need
117,500.00
as my contribution. I told them to collect all my papers in a nice neat pile and throw them in the bin. total *******
The I called Barclays and told them about all the messing around, a Business Manager called me straight back, listened and asked if I could come to see him in the morning, unfortunately I'm working so he's coming to my house on monday and were going to see the bakery together.....we shall see
117,500.00
as my contribution. I told them to collect all my papers in a nice neat pile and throw them in the bin. total *******
The I called Barclays and told them about all the messing around, a Business Manager called me straight back, listened and asked if I could come to see him in the morning, unfortunately I'm working so he's coming to my house on monday and were going to see the bakery together.....we shall see
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- Original Poster
- #76
Well here we go again,
one of Barclays Business Managers came around to my house yesterday to discuss funding my bakery. He seemed a decent bloke well switched on with plenty of good advice and products to help, I will get an answer within 2/3 days, beats RBS 10/12 weeks.........if sucessful I will then find out how much it will all cost my....
one of Barclays Business Managers came around to my house yesterday to discuss funding my bakery. He seemed a decent bloke well switched on with plenty of good advice and products to help, I will get an answer within 2/3 days, beats RBS 10/12 weeks.........if sucessful I will then find out how much it will all cost my....
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Can I ask a question...
If this contribution required by you is based upon their LTV for the business borrowing then why not tell a few porkies, I bank with Barclays and only use them because they are free... as a bank they are muppets in masks. They told me I didn't need a loan one time, so I replied then why the F___ did I apply for one, boredom...? Could you perhaps get the property over-valued by a friendly surveyor so the LTV calculations are all to pot... or do a three way purchase, your mate purchaces first and sells to you same day... only the last transaction is subject to taxation.
With £700.00 per retail premise + £450.00 residential per month these figures alone by 50% support a business investment loan to make the repayments, your own salary will be the guarantee. Remember you don't get to be a business bank manager unless you've run your own business and you don't need a job as a business bank manager unless your own business fell on its ass at some point, who are they therefore to give you advice on running a business.
IMHO, remove the thought of operating your own sandwich shop from the proposal as it will just confuse the bank's risk assesment team and offer it as a rental opportunity on top of the others in the project. Show that you expect 25% under occupancy at least and have residual funds to provide for this (i.e. repay the vultures) and more in keeping with your own outgoings, demonstrate that the property index is still below the 4X (four times) average income in your area and you expect the value of this purchase to drop for another twenty four months but as this is equity you intend to overpay. Then enquire about repayment insurance which you will (but they do not know) default upon at the first payment, the distance selling act kicks in and they can't force you to take this option on after they have approved and the funds been drawn down.
This seems a good investment, if you choose to run a sandwich shop in it then that's up to you but for the risk v's reward on this one I'd create another complimentary business suitable to the market and have a low hassle income. It's a retirement fund that one...
I hope I haven't missed any facts but followed the thread as best as possible.
If this contribution required by you is based upon their LTV for the business borrowing then why not tell a few porkies, I bank with Barclays and only use them because they are free... as a bank they are muppets in masks. They told me I didn't need a loan one time, so I replied then why the F___ did I apply for one, boredom...? Could you perhaps get the property over-valued by a friendly surveyor so the LTV calculations are all to pot... or do a three way purchase, your mate purchaces first and sells to you same day... only the last transaction is subject to taxation.
With £700.00 per retail premise + £450.00 residential per month these figures alone by 50% support a business investment loan to make the repayments, your own salary will be the guarantee. Remember you don't get to be a business bank manager unless you've run your own business and you don't need a job as a business bank manager unless your own business fell on its ass at some point, who are they therefore to give you advice on running a business.
IMHO, remove the thought of operating your own sandwich shop from the proposal as it will just confuse the bank's risk assesment team and offer it as a rental opportunity on top of the others in the project. Show that you expect 25% under occupancy at least and have residual funds to provide for this (i.e. repay the vultures) and more in keeping with your own outgoings, demonstrate that the property index is still below the 4X (four times) average income in your area and you expect the value of this purchase to drop for another twenty four months but as this is equity you intend to overpay. Then enquire about repayment insurance which you will (but they do not know) default upon at the first payment, the distance selling act kicks in and they can't force you to take this option on after they have approved and the funds been drawn down.
This seems a good investment, if you choose to run a sandwich shop in it then that's up to you but for the risk v's reward on this one I'd create another complimentary business suitable to the market and have a low hassle income. It's a retirement fund that one...
I hope I haven't missed any facts but followed the thread as best as possible.
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- Original Poster
- #78
Well Barclays got back to me today, remember I only spoke to them on Monday afternoon, they have made me an offer of 60% LTV, very impressed with the speed but I need them to move to 65%.
They have asked me a few more questions and I think if I give them the right answers this might just happen.
Makes you realisle how bloody hopeless natwest/rbs are.
They have asked me a few more questions and I think if I give them the right answers this might just happen.
Makes you realisle how bloody hopeless natwest/rbs are.
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