Buying a company that's about to go Bankrupt...
Discussion
What's the score?
I hear rumours that one of my competitors is struggling. They are absolutely huge, and I'm confident I can impose my business model on their workload and turn it around.
I looked at buying them a few months back but the owner was cagey about his accounts and never provided them. Don't think it was intended as secretive or underhand, I just get the impression it may have been embarrassing... especially if he was trying to trade out of a situation.
Anyway, what's involved with buying assets from the reciever and suchlike? I've never done it before
I hear rumours that one of my competitors is struggling. They are absolutely huge, and I'm confident I can impose my business model on their workload and turn it around.
I looked at buying them a few months back but the owner was cagey about his accounts and never provided them. Don't think it was intended as secretive or underhand, I just get the impression it may have been embarrassing... especially if he was trying to trade out of a situation.
Anyway, what's involved with buying assets from the reciever and suchlike? I've never done it before
Contact your competitor again.
If the administrators are appointed/about to be appointed the directors of your competitor should inform the administrator of your interest (since it may be in the best interests of the creditors).
Would the business be damaged by not trading if only for a short period of time?
If so, you may want to look at a pre-pack deal with the adminsitrator. Whereby the company goes into and then exists administration in a very short period of time.
Remember that the existing owners may be looking at the pre-pack route as well.
If you do get the company, prepare for weeks of s
t as you find out what poor decisions have been made in recent months (things done to keep the business running rather than with a view to the long term future) and for dealing with p1ssed off suppliers, who either won't want to dela with you or will put you on pro forma.
Would be very useful if you had a different set of suppliers in your own business that you could substitute.
keep the two businesses separate for the time being until you understand what you have acquired - no sense in letting the newly acquired business drag your existing business down.
Would also recommend getting a decent corporate finance specialising accountant on board - most will be happy to spend a couple of hours with you discussing options if there is the potential of a fee at the end of it
If the administrators are appointed/about to be appointed the directors of your competitor should inform the administrator of your interest (since it may be in the best interests of the creditors).
Would the business be damaged by not trading if only for a short period of time?
If so, you may want to look at a pre-pack deal with the adminsitrator. Whereby the company goes into and then exists administration in a very short period of time.
Remember that the existing owners may be looking at the pre-pack route as well.
If you do get the company, prepare for weeks of s
t as you find out what poor decisions have been made in recent months (things done to keep the business running rather than with a view to the long term future) and for dealing with p1ssed off suppliers, who either won't want to dela with you or will put you on pro forma.Would be very useful if you had a different set of suppliers in your own business that you could substitute.
keep the two businesses separate for the time being until you understand what you have acquired - no sense in letting the newly acquired business drag your existing business down.
Would also recommend getting a decent corporate finance specialising accountant on board - most will be happy to spend a couple of hours with you discussing options if there is the potential of a fee at the end of it
Stitch said:
Contact your competitor again.
If the administrators are appointed/about to be appointed the directors of your competitor should inform the administrator of your interest (since it may be in the best interests of the creditors).
Would the business be damaged by not trading if only for a short period of time?
If so, you may want to look at a pre-pack deal with the adminsitrator. Whereby the company goes into and then exists administration in a very short period of time.
Remember that the existing owners may be looking at the pre-pack route as well.
If you do get the company, prepare for weeks of st as you find out what poor decisions have been made in recent months (things done to keep the business running rather than with a view to the long term future) and for dealing with p1ssed off suppliers, who either won't want to dela with you or will put you on pro forma.
Would be very useful if you had a different set of suppliers in your own business that you could substitute.
keep the two businesses separate for the time being until you understand what you have acquired - no sense in letting the newly acquired business drag your existing business down.
Would also recommend getting a decent corporate finance specialising accountant on board - most will be happy to spend a couple of hours with you discussing options if there is the potential of a fee at the end of it
Yeah we have everything in place in terms of suppliers. I know for a fact that several lots of vehicle HP haven't been paid and drivers are getting cars repossessed from their houses. There are still good relationships there with account customers.If the administrators are appointed/about to be appointed the directors of your competitor should inform the administrator of your interest (since it may be in the best interests of the creditors).
Would the business be damaged by not trading if only for a short period of time?
If so, you may want to look at a pre-pack deal with the adminsitrator. Whereby the company goes into and then exists administration in a very short period of time.
Remember that the existing owners may be looking at the pre-pack route as well.
If you do get the company, prepare for weeks of s
t as you find out what poor decisions have been made in recent months (things done to keep the business running rather than with a view to the long term future) and for dealing with p1ssed off suppliers, who either won't want to dela with you or will put you on pro forma.Would be very useful if you had a different set of suppliers in your own business that you could substitute.
keep the two businesses separate for the time being until you understand what you have acquired - no sense in letting the newly acquired business drag your existing business down.
Would also recommend getting a decent corporate finance specialising accountant on board - most will be happy to spend a couple of hours with you discussing options if there is the potential of a fee at the end of it
I know there is a shed load of drivers waiting for money etc. So the deal may be that we raise finance to replace vehicle stock, pay the drivers up to date to get them on side, then substitute our business model.
I already know that the market can stand a 20% price increase, as we've seen increased sales growth despite raising our prices earlier this year.
I'm aware it may be in a s
t state, but basically I want to retain his drivers (all self-employed), take the phone number and novate his contracts to ourselves.The main assets I want are the phone number, whatever vehicles that aren't in arrears and the continuation of contracts.
I don't want the building, the computer system, the radios, the staff or anything... but I understand your point about keeping it all seperate for the time being. However, we could simply move the operation into our current office (just need another couple of workstations) and immediately shave off a s
t load of overhead...KingRichard said:
What's the score?
I hear rumours that one of my competitors is struggling. They are absolutely huge, and I'm confident I can impose my business model on their workload and turn it around.
I looked at buying them a few months back but the owner was cagey about his accounts and never provided them. Don't think it was intended as secretive or underhand, I just get the impression it may have been embarrassing... especially if he was trying to trade out of a situation.
Anyway, what's involved with buying assets from the reciever and suchlike? I've never done it before
I'm quite boring with this one but one of my few mantras is that you never buy a company, ever. You buy the assets that you want off that company.I hear rumours that one of my competitors is struggling. They are absolutely huge, and I'm confident I can impose my business model on their workload and turn it around.
I looked at buying them a few months back but the owner was cagey about his accounts and never provided them. Don't think it was intended as secretive or underhand, I just get the impression it may have been embarrassing... especially if he was trying to trade out of a situation.
Anyway, what's involved with buying assets from the reciever and suchlike? I've never done it before
Strip out the core essence and leave all the junk, liabilities and hidden nasties with the guys who put them there.
Horse_Apple said:
KingRichard said:
What's the score?
I hear rumours that one of my competitors is struggling. They are absolutely huge, and I'm confident I can impose my business model on their workload and turn it around.
I looked at buying them a few months back but the owner was cagey about his accounts and never provided them. Don't think it was intended as secretive or underhand, I just get the impression it may have been embarrassing... especially if he was trying to trade out of a situation.
Anyway, what's involved with buying assets from the reciever and suchlike? I've never done it before
I'm quite boring with this one but one of my few mantras is that you never buy a company, ever. You buy the assets that you want off that company.I hear rumours that one of my competitors is struggling. They are absolutely huge, and I'm confident I can impose my business model on their workload and turn it around.
I looked at buying them a few months back but the owner was cagey about his accounts and never provided them. Don't think it was intended as secretive or underhand, I just get the impression it may have been embarrassing... especially if he was trying to trade out of a situation.
Anyway, what's involved with buying assets from the reciever and suchlike? I've never done it before
Strip out the core essence and leave all the junk, liabilities and hidden nasties with the guys who put them there.
I want the drivers
I want the phone number
I want the existing contracts
I want the websites and email addresses.
That's it... don't need to buy the company I suppose, just the assets.
Whats the competition like in your industry? If the other company is about to shut up shop then I assume the services they were providing are still needed. Does your current company competitive enough to win the contracts?
Obviously there is alot more to this idea than I am explaining in this post. If you think its a viable idea then I will write up all the details.
Obviously there is alot more to this idea than I am explaining in this post. If you think its a viable idea then I will write up all the details.
CrashTD said:
Whats the competition like in your industry? If the other company is about to shut up shop then I assume the services they were providing are still needed. Does your current company competitive enough to win the contracts?
Obviously there is alot more to this idea than I am explaining in this post. If you think its a viable idea then I will write up all the details.
Sorry, I don't understand the question Obviously there is alot more to this idea than I am explaining in this post. If you think its a viable idea then I will write up all the details.
CrashTD said:
If the other company went bankrupt do you feel confident you could win their old contracts?
Why would I need to win them? If I buy them, I would have them.And if they went bankrupt without selling any assets to me... their drivers and work would be spread pretty evenly throughout my competitors I would imagine...
KingRichard said:
Why would I need to win them? If I buy them, I would have them.
The idea I had was to try and acquire the contracts without buying the firm.Obviously I don't know the amount of money your dealing with so the suggestions may be a bit absurd.
Do some maths and see how much it would cost to try and win the contracts. Look into employing the firm's top negotiator. Not good business ethics but that way the rapport will already be in place with the potential client. Providing you can match or beat the service then the client wont really notice the progression.
KingRichard said:
stuff....
I want the drivers
I want the phone number
I want the existing contracts
I want the websites and email addresses.
That's it... don't need to buy the company I suppose, just the assets.
Surely, in the case of a taxi firm, there are no other assets (not inc. office space)?!?!I want the drivers
I want the phone number
I want the existing contracts
I want the websites and email addresses.
That's it... don't need to buy the company I suppose, just the assets.
The Moose
Horse_Apple said:
KingRichard said:
What's the score?
I hear rumours that one of my competitors is struggling. They are absolutely huge, and I'm confident I can impose my business model on their workload and turn it around.
I looked at buying them a few months back but the owner was cagey about his accounts and never provided them. Don't think it was intended as secretive or underhand, I just get the impression it may have been embarrassing... especially if he was trying to trade out of a situation.
Anyway, what's involved with buying assets from the reciever and suchlike? I've never done it before
I'm quite boring with this one but one of my few mantras is that you never buy a company, ever. You buy the assets that you want off that company.I hear rumours that one of my competitors is struggling. They are absolutely huge, and I'm confident I can impose my business model on their workload and turn it around.
I looked at buying them a few months back but the owner was cagey about his accounts and never provided them. Don't think it was intended as secretive or underhand, I just get the impression it may have been embarrassing... especially if he was trying to trade out of a situation.
Anyway, what's involved with buying assets from the reciever and suchlike? I've never done it before
Strip out the core essence and leave all the junk, liabilities and hidden nasties with the guys who put them there.
Edited by amir_j on Wednesday 20th August 23:15
Wait for them to go pop, then cherry pick the contracts you want - why buy the business? All the drivers are s/e, so they'll be knocking on your door after the firm goes tits up anyway. The companies that use that firm will know of yours anyway so they will probably contact you once the firm ceases trading. There is nothing to buy - better spend your money on a bit of targetted advertising, and a lot cheaper than buying a pup.
Hold tight mate, there's going to be a lot of taxi companies going bang if the so called credit crunch bites any harder.
Hold tight mate, there's going to be a lot of taxi companies going bang if the so called credit crunch bites any harder.
richardxjr said:
You'll probably find the present owner is hanging on for dear life because he depends on it for his income. If/when it goes pop, he's got no back up plan.
If he came to work for you, you'll find he'd bring everything you need to your business.
Have a chat with him.
Or he can't let go of control and his ideas so far have failed (hence the situation they're in) and will end up being a right pain in the arse.If he came to work for you, you'll find he'd bring everything you need to your business.
Have a chat with him.
Speaking from experience of dealing with a company who was purchased by a chap. The old owner was kept on for "experience". All the staff listened to him and not the new boss, he caused big problems, gave everyone a payrise before the new owner came in, etc etc.
Since he was gone, it's a lot better.
KingRichard said:
Thanks for the opinions guys...
More interested in how it works with the receivers though. How do you know who 'they' are? Are they a firm of solicitors or accountants or something? How do you make contact, offers etc?
Thanks
The court appoints a insolvency practitioner- accountants or lawyers iirc (cash cow industry- they make easy money). By law they have to publish an ad saying so and so is banckrupt etc in the paper so have a look fro that/ask the company who was given it. More interested in how it works with the receivers though. How do you know who 'they' are? Are they a firm of solicitors or accountants or something? How do you make contact, offers etc?
Thanks
amir_j said:
KingRichard said:
Thanks for the opinions guys...
More interested in how it works with the receivers though. How do you know who 'they' are? Are they a firm of solicitors or accountants or something? How do you make contact, offers etc?
Thanks
The court appoints a insolvency practitioner- accountants or lawyers iirc (cash cow industry- they make easy money). By law they have to publish an ad saying so and so is banckrupt etc in the paper so have a look fro that/ask the company who was given it. More interested in how it works with the receivers though. How do you know who 'they' are? Are they a firm of solicitors or accountants or something? How do you make contact, offers etc?
Thanks
The general process is:
Business is wound up in the court by the owner of a creditor.
Official Receiver sends questionnaire to the owner who will then by interviewed by the O.R
Depending on the assets of the business, an Insolvency Practitioner may be appointed. If there are no or only a few assets then the O.R will handle the process themselves.
Business is wound up in the court by the owner of a creditor.
Official Receiver sends questionnaire to the owner who will then by interviewed by the O.R
Depending on the assets of the business, an Insolvency Practitioner may be appointed. If there are no or only a few assets then the O.R will handle the process themselves.
Catherine197 said:
The general process is:
Business is wound up in the court by the owner of a creditor.
Official Receiver sends questionnaire to the owner who will then by interviewed by the O.R
Depending on the assets of the business, an Insolvency Practitioner may be appointed. If there are no or only a few assets then the O.R will handle the process themselves.
Oh right, this is why if a business owes me a lot of money that remains unpaid, I can make a move to wind that company up?Business is wound up in the court by the owner of a creditor.
Official Receiver sends questionnaire to the owner who will then by interviewed by the O.R
Depending on the assets of the business, an Insolvency Practitioner may be appointed. If there are no or only a few assets then the O.R will handle the process themselves.
Thanks for the insight, and the reply
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