Starting out!

[jamesd]

Thanks desertrat0201. Hopefully in 2 or 3 years down the line i'll be ok and able to take a reasonable wage (probabaly not a lot but still a wage!) and have my own little company. Which is what i want in life!

I accept this year will be hard and i'll probabaly be working at least 6 days a week every week for little/no money at all.

 

I won't lie it does worry me about it all being my responsibility and worrying about having enough work etc how do you cope with things like that?

[jamesd]

Treedom hopefully i'll still be fit and want to carry on working when i reach retirement age! As i believe its good to keep active and fit otherwise you'll just do nothing and get lazy lol!

[treedom]

hey i want to enjoy retirement as much as you, its just dont working folk not retire, just drop down. Like getting flu at christmas!

[doobin]

Cheers for the help guys! I need to take out a loan as i'll be taking over the small business i currently work for so will be buying all the good will and equipment etc. So unfortunately i'll have to borrow, but at least i know i already have the work there.

 

 

Hold it right there. Ask yourself 2 questions.

 

1. How much are the tools worth on the open market?

 

2. How much is the goodwill worth? I can probably answer that for you- NOTHING!! Why is this 'small business' selling up? Because he's had enough/wants out? Then he'll have to take what he can get for the equipment and be grateful for it.

 

Nothing stops you having a quiet word with the customers about taking over when he hangs up the towel. What's he going to do, sack you? He wants out anyway!

 

If you wish to remain on good terms with him, then by all means make him an offer. But don't allow him to over value the goodwill. It's worth only what you are prepared to pay for it. Someone else who knows the score could already be tapping up the customers for all you know.

 

In fact, here's an idea. Post a list of kit and client base on here, and what he's asking. Folk are friendly here, and will see that you don't pay over the odds.

[jamesd]

Thanks doobin!

well to start off with whats a transit 56 plate with around 85,000 on the clock worth?

 

I'll make a list of all the other equipment and see what its worth. But to be perfectly honest we are on very good terms and he has ben VERY good to me over the past 5 years i've worked for him (part time at college then he offered me a full time job when i left).

[the hedge man]

Climbing a hill as soon as you start if you borrow money. Just buy kit for jobs when you need it.

[Goaty]

To be fair to current business owner as James points out he has been good to him, but don't pay over the odds. Beats me why window cleaners buy and sell rounds, you are not guarenteed to keep custom.You don't say if any staff included in deal, best to have just yourself or you and one employee. I've seen chaps set up, overwhelmed with work take on more staff then all out on different jobs doing little as possible, long breaks etc. Boss chasing around after lads then not doing work themselves.

 

Keep it small, turn away excess work keep reputation.

 

Could you pay in installments over 3 years? You would be better off paying a bit more to ex owner than being messed on by banks. Whatever you do put it in writing in duplicate for both your sakes.

[TKF]

Jamesd - whereabouts are you?

 

We deliver Business Start Up qualifications, one of our tutors has been a small business advisor most of his career. He advised me last week of a scheme he's involved with, along with Barclays and the Chamber of Commerce. This is a scheme for people in your position where you can access funding for 10 hours of mentoring with an independent business advisor to help you prepare your business plans and assist you working with banks to access loans and/or funding for your business.

 

Whilst he's delivering mentoring in Yorkshire, he told me it's a nationwide scheme.

[WorcsWuss]

Jamesd - whereabouts are you?

 

We deliver Business Start Up qualifications, one of our tutors has been a small business advisor most of his career. He advised me last week of a scheme he's involved with, along with Barclays and the Chamber of Commerce. This is a scheme for people in your position where you can access funding for 10 hours of mentoring with an independent business advisor to help you prepare your business plans and assist you working with banks to access loans and/or funding for your business.

 

Whilst he's delivering mentoring in Yorkshire, he told me it's a nationwide scheme.

 

This is the same [or modern incarnation of the same] course I did when I started out and is well worth doing

 

I would be inclined to pay heed to Doobin's comments regarding what a business is actually worth.... As he says, goodwill is worth nothing, signed long term contracts yes, but a list of names of people who have previously spent money with a business has no real value at all.

What about the name? Is it your previous employer's own name? Is it a well known local 'household' name. If so, that may be worth something, but not as much as you might think.... There's no reason why you can't mention it when looking for new business whether you buy it or not. 'Hi, yes, I used to work for so and so before he retired, now I've set up on my own using everything he taught me'....

 

And tools and equipment are also worth looking at a bit more closely. Bear in mind these are all second hand items so you need to be factoring in the eventual cost of replacememt as well. You also have no warranty on this stuff, so make an allowance for repairs and maintenance.

You may find that when you've produced your final business plan you would actually be no worse off if you went out and selectively bought only the stuff YOU need - rather than everything accumulated by someone else - brand/nearly new and with warranty, on a structured finance deal.

 

I know you want to see your employer right into his retirement and that is commendable, but don't let that blur your outlook and see you saddled with something which you could have had for free. In many cases it is no easier taking over and making an existing business work than starting from scratch, in some instances it's even more difficult.

Are you taking the business on part way through work? As part of this purchase do you get any work in progress which you can invoice straight away to begin generating income? Will what you buy generate any income at all if you do no marketing, does it give you orders in the bag? Or are you going to have to pound the pavements like every other new entrant anyway? But with the handicap of a larger overhead....

 

Just make sure you go through EVERYTHING until you can clearly prove the payback. And remember, if your current employer has not made adequate provision for his retirement then that's not your responsibility. It's tough enough starting out these days without making things doubly difficult for yourself...

 

Good luck with it!

Edited February 1, 2013 by WorcsWuss

[jamesd]

We already have 2 long term contracts for this year which i will be taking on so that will give me approx 3-4 full days work at lest a week. So i believe the goodwill is worth something. Again i won't know whether i'll keep these contracts the following year, but at least for the first year i know i've got work.