Self / Employed Pros and Cons
Discussion
Hey...looks like a weird first post, but I've been here a while lurking in the backround, but now need some wisdom.
I've been given the opportunity by a relative to take over the running of his business up here, whilst he opens another branch down south. he has offered to let me keep the stock that's already in the shop and just pay him the trade prices and keep the profits. I suppose it's a bit like a franchise in essence.
The only other overheads would be the electric and phone bills as the shop is his and attracts no rates as such.
I suppose what I'm asking really is that how difficult would it be adjusting from being employed, I have been since the age of 16 (now 22) with a steady income (with little savings) to going self employed without that guarantee that the bills would always be paid on time.
I still live at home and the only overheads I have at the moment are my car (finance), the insurance, my phone (on contract till August) and my board (not a lot), I do have other small things, like laptop insurances, but they can be stopped.
What I would like to here about is experiences of similar, or advise on how to handle the change.
In all likelyhood, the changeover wouldn't happen till the middle of the year, so I have a bit of time to save as much as possible to see me through a while, without much worry of missing bills.
Sorry for the long winded post, but any help would be appreciated.
Many Thanks,
Jovial
I've been given the opportunity by a relative to take over the running of his business up here, whilst he opens another branch down south. he has offered to let me keep the stock that's already in the shop and just pay him the trade prices and keep the profits. I suppose it's a bit like a franchise in essence.
The only other overheads would be the electric and phone bills as the shop is his and attracts no rates as such.
I suppose what I'm asking really is that how difficult would it be adjusting from being employed, I have been since the age of 16 (now 22) with a steady income (with little savings) to going self employed without that guarantee that the bills would always be paid on time.
I still live at home and the only overheads I have at the moment are my car (finance), the insurance, my phone (on contract till August) and my board (not a lot), I do have other small things, like laptop insurances, but they can be stopped.
What I would like to here about is experiences of similar, or advise on how to handle the change.
In all likelyhood, the changeover wouldn't happen till the middle of the year, so I have a bit of time to save as much as possible to see me through a while, without much worry of missing bills.
Sorry for the long winded post, but any help would be appreciated.
Many Thanks,
Jovial
What do you drive?Eric Mc said:
Are you buying the stock from him?
Are you paying rent fopr the premises?
Why are rates not being paid?
The stock is being given as a credit line, so I pay him when I sell it and keep the profits.Are you paying rent fopr the premises?
Why are rates not being paid?
The property is owned by him and he is more than happy for me to use it rent free.
I'm not sure on this one, this is what he told me and I'm not sure about exactly what it means.
Thanks, so far.
jovial said:
Eric Mc said:
Are you buying the stock from him?
Are you paying rent fopr the premises?
Why are rates not being paid?
The stock is being given as a credit line, so I pay him when I sell it and keep the profits.Are you paying rent fopr the premises?
Why are rates not being paid?
The property is owned by him and he is more than happy for me to use it rent free.
I'm not sure on this one, this is what he told me and I'm not sure about exactly what it means.
Thanks, so far.
So how is he making any money out of your branch? I don't understand why he'd try and expand his business by opening a second branch only to give all the profits away.
When he said he was going 'down south', are you sure he's not emigrating to Australia because his business is bankrupt?
When he said he was going 'down south', are you sure he's not emigrating to Australia because his business is bankrupt?
Sour Kraut said:
So how is he making any money out of your branch? I don't understand why he'd try and expand his business by opening a second branch only to give all the profits away.
When he said he was going 'down south', are you sure he's not emigrating to Australia because his business is bankrupt?
The business has already grown from online only, to having a shop, then to expanding to have another shop. He will be taking the online business and opening a new shop in England (I'm in Scotland, that's what I meant by down south). It wouldn't so much be his shop, it would be mine, with him leaving the stock that's there and me paying him back when I sell it.When he said he was going 'down south', are you sure he's not emigrating to Australia because his business is bankrupt?
He isn't going bankrupt, trust me on that.
jovial said:
Sour Kraut said:
So how is he making any money out of your branch? I don't understand why he'd try and expand his business by opening a second branch only to give all the profits away.
When he said he was going 'down south', are you sure he's not emigrating to Australia because his business is bankrupt?
The business has already grown from online only, to having a shop, then to expanding to have another shop. He will be taking the online business and opening a new shop in England (I'm in Scotland, that's what I meant by down south). It wouldn't so much be his shop, it would be mine, with him leaving the stock that's there and me paying him back when I sell it.When he said he was going 'down south', are you sure he's not emigrating to Australia because his business is bankrupt?
He isn't going bankrupt, trust me on that.
You're not being rude at all, and I undestand the method he has suggested be put in place so that he can recover the value of his stock. Obviously, you will have to buy future stock from your profit.
But that doesn't explain why he no longer wishes to make any gainful use of the asset which is his premises (by charging a rent) and the on-going value of the established business.
But that doesn't explain why he no longer wishes to make any gainful use of the asset which is his premises (by charging a rent) and the on-going value of the established business.
I got burnt by taking on a business from a 'family friend', ended up taking the name and ending up in a lot of Debt. It was rushed as he was ill, so we didn't check the details, as he was a friend!
I'd want a lot signed up and in writing to cover my self. You risk him kicking you out on your arse with nothing, and all the profit in HIS business. Do it correctly!
I'd want a lot signed up and in writing to cover my self. You risk him kicking you out on your arse with nothing, and all the profit in HIS business. Do it correctly!
I can see where your all coming from, let me give you a little backround on him. He's my brother-in-law by the way.
When he was 19 he went into business with his Father and Brother running a Fish & Chip shop, when he was 22 they expanded and bought a larger Fish and Chip shop that also had a restaurant and cafe attached. The initial shop is currently being sub-let by him.
The larger fish and chip shop was a failing business that he has turned around massively in the 7-8 years he's had it.
2 years ago he started up selling Hronby products online, then in September last year he moved the business into the shop it's in now, which he owned already and was letting out, the shop became empty and he moved in.
He now wants to focus soley on the model business, so wants to sell the Fish & Chip shop and move down south as we want to move out of the area and move back to England (where he's originally from). He plans to open a shop down there and run the online from there too.
I initially was going to run the shop as an employee of his, but he has asked if what I thought of this deal. He's a good man, been a good friend to me since he got together with my sister.
So there we go, as little gushy, but gives you a backround about him.
Eric Mc - As I siad I'm not sure about the Rates, but he did say there would be none for me to pay.
Thanks, Jovial
When he was 19 he went into business with his Father and Brother running a Fish & Chip shop, when he was 22 they expanded and bought a larger Fish and Chip shop that also had a restaurant and cafe attached. The initial shop is currently being sub-let by him.
The larger fish and chip shop was a failing business that he has turned around massively in the 7-8 years he's had it.
2 years ago he started up selling Hronby products online, then in September last year he moved the business into the shop it's in now, which he owned already and was letting out, the shop became empty and he moved in.
He now wants to focus soley on the model business, so wants to sell the Fish & Chip shop and move down south as we want to move out of the area and move back to England (where he's originally from). He plans to open a shop down there and run the online from there too.
I initially was going to run the shop as an employee of his, but he has asked if what I thought of this deal. He's a good man, been a good friend to me since he got together with my sister.
So there we go, as little gushy, but gives you a backround about him.
Eric Mc - As I siad I'm not sure about the Rates, but he did say there would be none for me to pay.
Thanks, Jovial
Don't take his word for it. Find out on what basis the shop has no rates liability.
It is very unlikely that a retail premises is exempted from paying business rates.
When acquiring a business from someone else, there is a process known as "due dilligence" i.e. the purchaser does as much as he can to independently verify the assertions of the seller. Merely taking a seller's word for things is just plain dumb.
I presume you are at the very least going to ask to see sets of accounts covering at least three year's worth of trading - preferably accounts prepared by an independent and qualified accountant.
It is very unlikely that a retail premises is exempted from paying business rates.
When acquiring a business from someone else, there is a process known as "due dilligence" i.e. the purchaser does as much as he can to independently verify the assertions of the seller. Merely taking a seller's word for things is just plain dumb.
I presume you are at the very least going to ask to see sets of accounts covering at least three year's worth of trading - preferably accounts prepared by an independent and qualified accountant.
Edited by Eric Mc on Wednesday 12th January 14:40
illmonkey said:
Hum. Could he be wanting to start up the new shop with new stock and get people adjusted to the new address/location, while keeping the currently place going until stock has been depleted? Then he just closes the shop?
Indeed. The OP can be sure that all internet order fulfilment will be coming through the new shop.Eric Mc said:
Don't take his word for it. Find out on what basis the shop has no rates liability.
It is very unlikely that a retail premises is exempted from paying business rates.
When acquiring a business from someone else, there is a process known as "due dilligence" i.e. the purchaser does as much as he can to independently verify the assertions of the seller. Merely taking a seller's word for things is just plain dumb.
I presume you are at the very least going to ask to see sets of accounts covering at least three year's worth of trading - preferably accounts prepared by an independent and qualified accountant.
When he said 'none', I think he just meant that his BiL will be picking it up.It is very unlikely that a retail premises is exempted from paying business rates.
When acquiring a business from someone else, there is a process known as "due dilligence" i.e. the purchaser does as much as he can to independently verify the assertions of the seller. Merely taking a seller's word for things is just plain dumb.
I presume you are at the very least going to ask to see sets of accounts covering at least three year's worth of trading - preferably accounts prepared by an independent and qualified accountant.
Thanks for the advices lads, gives me a bit to ask him and a bit to think about.
I know he wouldn't try to diddle me over and wouldn't tell me rubbish.
I am aware that all the online orders would go to the new shop, but what I was thinking is that initially I use his stock and once I sell his, buy my own with the profits, separating myself from that credit line as soon as I can, not that that initial helping hand wouldn't be appreciated. Then I would continue on my own, slightly changing the focus of the shop and possibly changing the name. Obviously I would offer to pay rent at this point as it would no longer be his business runing from his premises.
I would ask to see some accounts and everything before signing on the dotted line as such.
I know he wouldn't try to diddle me over and wouldn't tell me rubbish.
I am aware that all the online orders would go to the new shop, but what I was thinking is that initially I use his stock and once I sell his, buy my own with the profits, separating myself from that credit line as soon as I can, not that that initial helping hand wouldn't be appreciated. Then I would continue on my own, slightly changing the focus of the shop and possibly changing the name. Obviously I would offer to pay rent at this point as it would no longer be his business runing from his premises.
I would ask to see some accounts and everything before signing on the dotted line as such.
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