Scoob99

iTrader: (1)

Basicilly my wife is a florist, She works from home and has built up quite a very good small buisness from home, now a chance has come up to buy a fantastic florist shop in a prime location, now could any of you buissness people give me some idea how to go about buying this shop for her, I have already this morning been on to Barclays to inquire about a buisness loan but have been told you have to put half up front Now my question is, is their other banks who are willing to lend you most of the money, we have a morgage on the house and i need to find out where to go from here, If any of you can help I would be very grateful.
Cheers
Colin

New_scooby_04

iTrader: (4)

Colin,

There are a few banks (Nat West being one, I think) that have Small Business advisors that would be in the best position to help you. You need comprehensive advice for such a venture, not scraps of info from on here!

Ns04

The Zohan

Hi

Good stuff,

OK then.

Few questions,
Are you buying the exisiting florists business and goodwill (and any debts, etc) along with the shop or are you looking to lease this shop itself or buy it outright?

Does the existing shop/business have any staff to consider?

It all kinda depends on what you are looking at really. If you are after the other business/goodwill then you will need to perform due dillignece to see how it has been performing or not, assests, debts, goodwill, staff/overheads, etc.

If you wife only wants to start up on her own in new premisis and does not want/need the other businesses name/goodwill then maybe look at new premisis, etc. If she is doing OK inspite of the other business then the money may be better spent elsewhere or saved in the first place.

You will need a business plan with history of the business so far and projections for the next few years, not overly detailed but the bank want to know that you are commited and know something of business and have a cunning plan before they part with the reddies.


talk to a small business advisor, they usually have a start-up pack or such like that will help get you started and has the correct info, maybe best ask for a business bank reccommendation on SN

spireite

Surely all you need is a van and sit outside the local graveyard or hospital

sorry ,try HBOS there usually good for business loans

Shark Man

Small business and Barclays sets alarm bells riging for me. I can't say this doesn't happen with other banks, but they are notoriously ruthless for calling loans prematurely if they think your business is struggling - moreso than other banks that we've had to deal with.

....get on the mend, pay some money into your account, and before you know, account frozen and your forced out of business.

It's happened to three of our small business clients, and no form of negotiation seems to be able to resolve the matter in favour of keeping the business running.

I suppose the trick is not to run your main business banking accounts with the same bank as who is giving the loan.

Just a warning. Certainly worth shopping about and taking as much advice as you can because of that.

alcazar

iTrader: (2)

Lloyds TSB have dedicated business advisers too.

Alcazar

XRS

Ask a financial advisor about buying the premises with a SIPP (if you have one)

sti-04!!

That **** Bannatyne was doing an advert on the radio this morning for Lloyds TSB & small business advisors.

MikeCardiff

iTrader: (2)

If possible avoid banks small business advisors - mine is 18, has never been in business and dont know the first thing about it ( as an example, he is fixated on turnover for some reason, without realising that turnover is pretty much irrelevant compared to profit ).

Yes, you will need to stump up a decent percentage of the money unless you can buy it outright - buying a business is an investment, i.e. it may go **** up and you lose everything, so banks are wary about how much they will lend.

First thing to do is get an accountant to check the business books - a friend of mine was looking into buying a business, and initially it all sounded fine until we looked at the books and realised the owner didnt know the difference between turnover and profit ! and in reality the business was hugely over valued.

If the books look OK, find out why the owner is selling - if it is because they are retiring, moving away etc... its OK, if they are selling up because they are making FA money, or know that a competitor is moving in next door then run.

What I would say is dont even consider re-mortgaging your house to fund the purchase unless you are REALLY sure it is a going concern. If the business fails you will lose your house and be stuffed.

A good first port of call would be your local FSB office as they will be able to point you in the right direction for advice.

scousefly

someone to write any literature cause your spelling is awful

Thought about this a long time ago but to be honest when I started putting the 'feelers' out people just tried to take advantage so I decided I wanted to be employed rather than employer.
Good luck though with the venture if ye decide to proceed.

StickyMicky

how much do you actually need?

is the money just for start up or to actually buy the property?

if its just for start up, you might get away with an unsecured personal loan so you can buy your wife a new car

if the property is already a florist, why is the seller selling?


i used barclays myself for the business account, but there are far cheaper options out, i just wanted convenience because my personal and e-savings account are with them, although i have been considering moving the business account to somebody else as barclays are raising the rates again and paying £100 per month just to pay fooken money in to an account is ridiculous IMHO

MikeCardiff

iTrader: (2)

StickyMicky - have you looked to see if Barclays do any other tariffs for business account. My account is with LLoyds and I dont pay them anything for credit card, online or bank transfer deposits - the only charges I have to pay are on cheque deposits, and as I hardly get any cheques ( and can just pay them into my personal account instead ) my charges are next to nothing.

GaryK

I would actually strongly advise against that (as per other posters experiences) small business advisors ain most banks are completely clueless and have *never* actually ran a small business. I remember years ago starting one business we went to barclays and my partner at the time mentioned we would run financial year 1 for 18 months to which the advisor replied 'o can you do that then?', unfortunately I didnt have a copy of company accounting for dummies with me to hand over.

Now onto the question, well Col the banks wont take the risk, simple as that. You will have to look at security in your own property, angel investment (based on an equity stake) or you may get a better deal (but not 100% finance) from a small independant bank. If you are serious as I recall you are near me and my accountant is an all round good guy (not your typical beano) who also spends alot of time helping businesses raise finance, selling businesses etc, he has helped me raise private equity finance in the past so if you PM me I can let you have his details, he's just outside Bedford.

Cheers

Gary

MJW

Have a read up on Business Link :

Starting up | Business Link

The Chief

That is soooo true.

A few years back me and a buddy went to see a business advisor, after him spieling on how good he was blah blah, i asked him how many businesses he had set up or owned, he replied he onced owned a fastener company for a short period, i asked how it was doing? he said it had folded due to poor sales!!!! I mean FFS i knew more than this balloon and thats not much

al4x1

yep as said we're with barclays and even the overdraft they have secured. Small businesses have this habit of going **** up so banks are pretty reluctant to lend to ltd companies as they know its high risk. If you're renting premesis etc make sure its all in the company name. I'd prefer to borrow it on your mortgage to set up as long as you know its viable as its one of the cheapest ways of borrowings and as long as you can support the mortgage without your wifes input then you won't loose the house. The big things are keep the overheads down and as said focus on profit. It is useful being on the high street but not essential as your wife has found out. With the right marketing and contacts you're better off running it from cheaper premesis on Industrial areas etc as vehicle access is so much easier. After all most people when buying flowers look in Yell, the yellow pages and the likes so it doesn't matter where you are just that the service looks good

MikeCardiff

iTrader: (2)

The other thing to look at is :

At the moment you say she is doing well working from home - does she really need to get a shop ? A big reason for a lot of businesses going under is borrowing money to expand, then not making enough extra to cover the loans etc...

It could well be that the extra ( if any ) money she makes from the shop isnt worthwhile for the extra work and investment needed to make it.

The rent on the shop, loan repayments bills etc... will have to be paid every month, irrespective of how much money she has made. If she gets a couple of quiet months, tough, they still have to be paid.

Being able to operate on minimal overheads is the best way to go, and expand when you can afford it from your profits already made. ( As an example, I bought a new piece of machinery that cost around £12K last year - I knew it would bring in extra work and pay for itself fairly quickly, but I waited until I could afford to buy it outright rather than getting a loan and having it earlier ).

The other good thing I have found in business is to be happy with what you are earning if it is enough for what you need. Dont always chase after earning more and more money, as for some reason you'll find that to double your income means working 4 times as long, and in the end you just end up working all hours for money you arent even spending.

I'm sure this goes against the advice of people like Bannatyne who say take all the risks otherwise you'll never be a multi-millionaire, but for every one person who makes a fortune, there are probably 99 who lost their houses or went bankrupt trying.

And a quick P.S. to the poster who suggested not asking on here, and going to a banks SBA - this is probably a better place to ask as you can get the opinions of people who have set up and already run their own business, rather than someone in a 'two suits and shirts for £99' getup in your local bank !

BlkKnight

look at joining these guys to get good bank rates & general advise:

I've saved about £10K P/A in credit charges alone

British Shops and Stores Association (bssa)

Luan Pra bang

Banks will happily lend 85% if you are buying a freehold but if its a lease they may be very wary. Purchasing goodwill can be dangerous especially if the owner has a good relationship with their best customers and takes them along to their new shop up round the corner.

David Lock

I think that has some very sensible comments. Whilst not trying to put a downer on your enthusiasm do think very long and hard about the extra risks and costs of running the shop. Business rates which can be a killer, insurance, staff etc etc. Being even gloomier would it be reasonable to speculate that flowers are a bit of a luxury and sales would suffer if there is a recession for a while? If your wife becomes a sole trader then if the business goes down her personal assets will as well. And don't underestimate the worry and stress. Not for the faint hearted.

Good luck if you do go for it btw.

Oh and Banks are rubbish IMHO

dl

Scoob99

iTrader: (1)

Thanks guys for all your replys, the buisness is up for sale due to a breavement and retirement, we know the shop and what it is capable of doing, i know for one moment it will not be easy, but i feel my wife deserves the chance of owning her own flower shop, this is not something she has just thought of she has been a florist all her life and she has done many things for many famous people, she does things with flowers that just blow me away, so if i can help her i want too, basicly i have no experiance but i know my wife would make the buissness work very well.
Cheers
Colin

P20SPD

iTrader: (1)

Go see a good accountant, most initial consultations should be free, and if they are decent, they should assist you by taking all the stress of organising funding away from you.

The accountant should also point pitfalls of the potential business out, at the same time as pointing out any benefits. They can also be very good negotiators on your behalf when dealing with the vendor.

Most accountants have banking contacts that they can lean on, and will often obtain better lending rates for their clients than the client going to the bank cold. In other words, the banks tend to feel more reassured if an accountant with reputation actually recommends the purchase, and are therefore more willing to lend.

I would point out (it may be obvious to some), that some banks are pulling in the net when it comes to their lending policies, and are being far less liberal with their lending, so the proposal would have to stand up for itself.

If the proposal does stand up for itself, then the bank should lend, because they will make money out of you. If it doesn't stand up for itself, they wont lend, and you should not be buying the business.

Steven

MikeCardiff

iTrader: (2)

And if all else fails, you can always go on Dragons Den !

Which reminds me - I wonder if Peter thingy off there ( the tall posh one ) has paid back all the people he stitched up when he went bankrupt ( twice IIRC ) now he has pots of spare money ?

One other thing I did think of though - if you are thinking of going ahead with this, it may not be the best route for your wife to set up as a Ltd Co - a lot of lenders will run a mile at a new business setup that is in reality a sole trader if they try and go Ltd ( chances are they will also insist that any loans are secured on your house anyway, which would be the only real benefit of being Ltd ) as they have been burnt in the past.

StickyMicky

iirc after the 18 month grace period without any charges i was offered a choice of 2 "tarrifs" and i think i picked the best from the 2


i think the problem is, all my money is paid in cash, and it seams barclays just dont want it

abbey do "free business banking" if you only put small amounts in (under 3k per month i think?) but i think the charges for going over are higher.

we would be over 8/9 months of the year so its not an option but could be good for the OP

my local abbey is in quite bit of a crappy location for paying in, meaning a car park quite far away and a walk around the town centre to get to the actual bank itself, which is no good with a bag full of cash IMO

the barclays i use is 100% spot on for paying in, enabling a park outside and a 2 sec walk into the "back doors" to the depositing machine


needs carefull thought, seen far to many mates getting attacked for cash!!??!!??!

billythekid

This is something I did about 12 months ago now. I left my job of 10 years to run my own business. It was completely unrelated to my old job so I was starting fresh. Major risk, I left a very stable job, but I think so far I have been happier running my own business even with all the stress it brings.

There are lots and lots of things to look into, company law, NiCo,tax, vat, suppliers, customers, advertising, employees, banking, insurance, computer systems, websites etc etc etc. Some of these things sound simple, for example website - this has taken, so far, about 5 months to get sorted. And its cost 2x what we thought it would.

I was lucky in that I bought an existing business so we had a lot of this in place already. But to be fair its taken about the last year to get thinks rolling properly.

In general, my main concern with any business is cash flow. I know how much it costs to run my business in very high detail. I would advise you do the same.

Another thing, more of a personal thing, you will have a lot less spare time. I did not think it would impact that much but for the last year I have probably worked on average 60 hour weeks. I have had 2 weeks off in 1 year. And those were due to our annual winter close down due to the type of business it is.

Good luck with it!

Scoob99

iTrader: (1)

Cheers Billy

nooobyscoooby

Take it from me - there's no such thing as a fantastic florist shop as far as making money is concerned!

I've been around the trade for over 20 years and know it from the farms where the flowers are grown in Colombia, through air transport, road transport, customs clearance market deliveries, wholsesalers and a chain of Interflora shops as well as a very high profile and very successful shop rated as the best in the Cotswolds.

There are hundreds of florists for sale throughout the UK. Do a search on businesses for sale and wonder "why?" long and hard.

The whole nature of the business has changed over the years.

Whereas once upon a time over 70% of flowers were sold through florists, that figure is down to 35% and dropping year on year.

Use your eyes: you can buy flowers from any garage, many newsagents, all the supermarkets and there are dozens of on-line opportunities. You can even order flowers in Woolworths, Clintons and the Post Office!

Many of these place sell crap flowers and have nothing like the quality or style of a proper florists, but people are increasingly using them whilst florists face increasing rent and rates and others take their business and the margins are being slashed.

Take a £40 interflora delivery - not cheap in most peoples' minds but this is how the money goes. The originating florist gets 20% - £8.00. Interflora takes £4.00 The florist that actually does the work now has £28 to play with. Knock £8 off for the delivery assuming it is really local and we're down to £20.

Knock a further £2.00 off the cellophane, ties and card and we are at £18.

You take the cost of your flowers and multiply by 2.5 to get your sale price so the actual amount of flowers going into this bouquet is about £7.50 - and you paid £40!

And out of that has to come your rent, rates, insurances, electricity, wastage, wages, national insurance and so on.

So sensible people go on line, find a local florist and cut out the middle people!

I can show you florists for sale in every single town along the length of the Cotswolds and that story is repeated everywhere.

Yes, people can make the numbers look good when it comes to selling, but the harsh reality when it comes to real nett profit is very, very different.

If you don't use the Flying Dutchmen, Metz or similar to deliver to your shop, you have to add in the time and cost of going to markets in the middle of the night where the quality outside London is often appalling.

Being a good florist requires a very creative talent that needs to be refreshed to stay ahead of the game. #

Doing that, running a shop, getting all the sundries - pots, plants, and so on- and keeping the whole thing fresh and vibrant is extremely hard work and many florists burn out. The work is hard on the hands, arms and shoulders, and on the the legs, and is very often cold too.

The best advice I can give you is for you to work out how much you can afford to lose because you will.

I am sorry if this dashes your hopes, but unless you have done a huge amount of homework, been to Amsterdam to see the amazing flower market at Aaalsmeer [5 million square feet with a 13 kilometre overhead "railway" for the flowers and sales in multiple auction rooms going on a ten seconds per lot sold], done the rounds of the UK markets to see the difference, been to the various floristry exhibitions, gone to see lots of shops that are for sale and asked some tough questions, and defined your house style, you will simply be asking Barclays to arrange your own personal bonfire of pound notes.

nooobyscoooby

Colin

I have sent you a mail too.

MikeCardiff

iTrader: (2)

Some good advice from someone in the trade there.

I dont really buy flowers, we have a garden full of various sorts that we can stick indoors ( nothing to do with us, previous owner was a great gardener and did a really nice job on the garden ) - about 12 varieties and colours of roses alone from large old established bushes, and they lasted from around March to October last year.

Our local Tesco has some nice ready made bouqets that are fine for presents for most occasions, and I imagine most people would do the same as me and pick them up there with their shopping if they needed some.

A lot of types of business that were traditionally small high street types are suffering now, mainly because they didnt predict how much online shopping was going to take over and didnt move in quickly enough. Add to this that shopping in town centres is now a complete pain with parking etc.... and its not surprising that specialist shops arent getting the passing trade they need to survive.

In a way the demise of the town centre is a shame, but shopping has changed hugely over the past few years. Rather than being restricted to one place to buy a specialist item, customers now have the whole world to shop from and find things.

I know a few people who used to run specialist shops ( fishing supplies, model kits and art supplies ) who used to have retail premises who have now gone to online only - they run the business from home, have minimal overheads and are making more money than they used to with less work, hassle and costs.

David Lock

And a lot of those specialist shops are now having to offer price match against net shopping which is unfair but that's the way it is.

Nooobyscoooby obviously knows his stuff and I doubt that you would get that sort of useful commentary from a bank's business adviser.

The florist in my village closed a couple of years ago. Very little general trade and really only busy on Mother's Day and things like that. Most of her work was on weddings and private functions and she didn't really need a shop for that.

I am as guilty as anyone about getting a reasonable bouquet at the garage for £6.95 rather than the hassle of visiting a florist and paying a lot more. dl