Reply to: Buying a Business

[Big Blue Plymouth]

Wait, so the building is owned by the business but the land underneath it is leased? Hmm. I would be very cautious - Baring in mind my mates aforementioned business literally halved in size due to relationships going sour, if that land owner and you don't see eye to eye then it could end in tears.

From the outside it looks like the business owner has a few problems:

1) Business losing money
2) Lease probably approaching renewal / running short of time
3) Fed up of using his time at weekends sorting out 16 year olds that didnt turn in for work
4) No online presence and has no idea where to start
5) Has other commitments (suspect this is only a minor part of his reason for sale)

Based on those points alone I would say that business of his is really not worth all that much and it sounds like a huge amount of work to get going - great project! You'd really have to be truly invested in it emotionally and financially though I feel, OP.

Yes, I think your posts and others have put it into perspective.

I'll still have a look though.


Probably better to buy my own plot and set it up myself. Don't know what the rules are on using agricultural land for horticultural purposes, especially wrt to a retail outlet. Probably a whole world of pain....

[mattfx]

Wait, so the building is owned by the business but the land underneath it is leased? Hmm. I would be very cautious - Baring in mind my mates aforementioned business literally halved in size due to relationships going sour, if that land owner and you don't see eye to eye then it could end in tears.

From the outside it looks like the business owner has a few problems:

1) Business losing money
2) Lease probably approaching renewal / running short of time
3) Fed up of using his time at weekends sorting out 16 year olds that didnt turn in for work
4) No online presence and has no idea where to start
5) Has other commitments (suspect this is only a minor part of his reason for sale)

Based on those points alone I would say that business of his is really not worth all that much and it sounds like a huge amount of work to get going - great project! You'd really have to be truly invested in it emotionally and financially though I feel, OP.

[Big Blue Plymouth]

You can pay 16 year olds with cider in Dorset I understand.

Doesn't seem to be anyone under the age of 70 round here

Just as well Yeovil's just across the border. An endless supply of young oiks there....

[Lance]

Don't have many of then in Dorset ;-)

But, yeah. Buying a pick up with some kit, and employing a couple of young scrotes might have some mileage.

You can pay 16 year olds with cider in Dorset I understand.

[Big Blue Plymouth]

you do the head gardener bit and drive the oiks round was the idea.

Don't have many of then in Dorset ;-)

But, yeah. Buying a pick up with some kit, and employing a couple of young scrotes might have some mileage.

[Lance]

I'd be buying the buildings and all his stock.

buildings on land you don't own aren't worth much unless you can get a decent lease. Although there may be some value there.

What I know about retail is that the only stock that's worth money is the stock that the customers are taking away. If they're not taking them you're a warehouse not a shop.
So be very cautious about applying ANY value to stock that isn't selling. And if it is selling then the business shouldn't be losing money.

[Lance]

Age isn't on my side...

you do the head gardener bit and drive the oiks round was the idea.

[BrilloPad]

a business without assets, making a loss, and you want an accountant's opinion on it's value?
It's worth f*** all.

If you're interested then take a look at the books, calculate how long before he goes bust and offer to take it over and get him out of the rent contract. For free.

+1

A friend of mine owned his brother-in-laws restaurant that was running at a loss. He thought he could always sell it.

It was worth nothing. Caused him to divorce from his wife who supported her brother.

[Big Blue Plymouth]

the garden centres near me make a mint on the coffee shops and Santa's grotto. They are huge though (multi-millions just in real estate).

OP pointed out that he knows landscape gardening. That would surely make a better business than a shop. You cannot get good gardeners.
All I want is someone to turn up every other week, do the weeds and plant 'stuff' that's colourful. A business model I've looked at is where a head gardener does the 'here's the stuff to plant' and send the minimum wage oiks out to do the donkey work.

And then I remember my advice from earlier and get back to work.

Age isn't on my side...

[Big Blue Plymouth]

a business without assets, making a loss, and you want an accountant's opinion on it's value?
It's worth f*** all.

If you're interested then take a look at the books, calculate how long before he goes bust and offer to take it over and get him out of the rent contract. For free.

I'd be buying the buildings and all his stock.

[Lance]

I suspect it currently isn't profitable.

It's being sold because the current owner has another business that is taking up too much of his time. And, yes, it probably does need turning around - there's no online presence at all at the moment.

I'd have thought looking at the books would have some kind of leverage in negotiating a price and also give me insight into all his outgoings too.

The thing that slightly concerns me initially is that it's on land owned by another business, effectively a concession. Not sure how that relationship would evolve.

a business without assets, making a loss, and you want an accountant's opinion on it's value?
It's worth f*** all.

If you're interested then take a look at the books, calculate how long before he goes bust and offer to take it over and get him out of the rent contract. For free.

[Lance]

Not going to be exactly the same with your potential garden centre, but certainly you'll have to get your head around a lot of targeted advertising and such, if you want to succeed.

the garden centres near me make a mint on the coffee shops and Santa's grotto. They are huge though (multi-millions just in real estate).

OP pointed out that he knows landscape gardening. That would surely make a better business than a shop. You cannot get good gardeners.
All I want is someone to turn up every other week, do the weeds and plant 'stuff' that's colourful. A business model I've looked at is where a head gardener does the 'here's the stuff to plant' and send the minimum wage oiks out to do the donkey work.

And then I remember my advice from earlier and get back to work.

[Big Blue Plymouth]

Why is somebody selling a profitable company?

What I was more trying to get at was looking a business just on it's books and asking if it's a goer seems like a poor start. Having the ability to market, run and manage a business comes first, an idea of a market to sell to and why comes second and so on until the actual fact the business you buy makes money under the old management I would have thought was low on the agenda. That's for you to turn around if you are good enough. Might be profitable on the books run properly by the old crowd. Not too difficult to come in and destroy that in no time.

Just seemed to be an arse about face way of approaching it.

I suspect it currently isn't profitable.

It's being sold because the current owner has another business that is taking up too much of his time. And, yes, it probably does need turning around - there's no online presence at all at the moment.

I'd have thought looking at the books would have some kind of leverage in negotiating a price and also give me insight into all his outgoings too.

The thing that slightly concerns me initially is that it's on land owned by another business, effectively a concession. Not sure how that relationship would evolve.

[northernladuk]

Just put the books online and NLUK will give you the full SP....

I'd have to ask my accountant first.

[BrilloPad]

Anyone here got any experience of buying a small retail business (specialist garden centre, in this case).

Would be interested to know how to go about establishing if somethings going to be a goer or not.

I guess it all boils down to price and how profitable the business is by hiring an accountant to look at their books.

Be interested to hear from anyone who has taken the plunge....

Just put the books online and NLUK will give you the full SP....