Closing a business down

[allchange]

I have my own business, its been going for about 5 years now, its never quite taken off and the industry we are in is changing and fees are being driven down.

We have 1 member of staff.

We take hardly anything out of the business and its harder and harder each month.

A job has come up which fits well for me but..

I have a reluctance to close the business down, possibly vanity - don't want to be seen to be a failure and all that and a nagging doubt that it could work out and be an opportunity for my children (should they want to)

Anyone had any experience of closing a business and going back to employment?

(regular user, new name)

[DSLiverpool]

As your incognito can you give more details of the market sector and area of expertise so the massed ranks of PH gurus can discuss if it has legs.

[anonymous-user]

If you have the desire, strategy and money to turn it around, go for it. Otherwise shut it down and get on with your life, as you can't buy back time.

[spikeyhead]

Make the employee redundant, pay off any debts, extract whatever pennies are left in the business from the account and fill in form DS01

[allchange]

In response to more info:

Traditional estate agency (shop front) locally we are all losing instructions to online agents with millions to spend/ lose on marketing.

Catch 22, not enough £ to market = not enough £

Our lease is up in 10 months so maybe one last push?

We have minimal debt.

[DSLiverpool]

Change to a letting agency as well?

[allchange]

We do lettings - all be it not on a huge scale

[DSLiverpool]

allchange said:

We do lettings - all be it not on a huge scale

Ok before you bin the agency what about looking for a lettings partner, better 50% of something than 100% of nothing?
Worth a bit of advertising to see if you find a great person who needs the infrastructure?

[Blown gaskets]

allchange said:

I have my own business, its been going for about 5 years now, its never quite taken off and the industry we are in is changing and fees are being driven down.

We have 1 member of staff.

We take hardly anything out of the business and its harder and harder each month.

A job has come up which fits well for me but..

I have a reluctance to close the business down, possibly vanity - don't want to be seen to be a failure and all that and a nagging doubt that it could work out and be an opportunity for my children (should they want to)

Anyone had any experience of closing a business and going back to employment?

(regular user, new name)

Jeez! I looked at this and thought I`d written it myself! Only difference is that I`ve got 2 staff. It`s not just the online agents that are killing it. It`s the amount of agents over-valuing the stock in our town too. There are 18 agents in our town plus the online guys. There`s just not enough leads to go round...and yes, we do direct mail, Social Media, PPC, Press Ads, Leaflets, pay for outsourced online generated leads.
Our overheads are near £11k mth and I know if I used that money to fund my other business, I`d make a hell of a lot more.

If you are like me, you don`t want to give up but you also don`t want to work for free. I make more with prop investing than I do with the agency, and I love that. I think it`s time to go back to basics and realise there`s easier ways to earn a living.
I couldn`t work for anyone else though. I`ve been self employed for over 25yrs.



Our Rightmove contract runs out in 6mths (currently near £2k mth) so I will be making a serious decision nearer the time because if we threw the towel in now, they and other portals would still want their full money.

[surveyor]

Just done it. Not going particularly smoothly at this point, although today is my first day of holiday where I am paid for 12 years. Which is nice..

Other people making decisions that affect you is my major negative so far.

[jammy-git]

Why not go to online only, but with a local presence?

[EddieSteadyGo]

jammy-git said:

Why not go to online only, but with a local presence?

That's like the worst of both worlds. All of of the same overheads but at the same time having to charge lower fees in order to competitive in the on-line world.

[EddieSteadyGo]

allchange said:

In response to more info:

Traditional estate agency (shop front) locally we are all losing instructions to online agents with millions to spend/ lose on marketing.

Catch 22, not enough £ to market = not enough £

Our lease is up in 10 months so maybe one last push?

We have minimal debt.

No doubt the market is changing, and your on-line competitors have marketing money to burn.

But the on-line guys face a real issue - when selling a property, a good agent can more than justify their fees by using effective sales practices. This starts with the basics of managing the initial enquiry, to how the property is shown to the prospective buyer, to how they follow up viewings and how they create the feeling of a property being in demand.

However, in my view the key to a successful estate agency is the initial pitch which gets the property on your books in the first place. I have seen some estate agents being far better at making this pitch than others.

So the first place I would start is trying to bench-mark against your local competitors what percentage of the valuations you undertake are you getting the subsequent the instruction on.

Next is to rehearse your arguments to explain to prospective customers why your fees are superb value for money. What matters to the client is the sale price minus fees. If you can explain how you can sell their property more quickly and for a higher price, why would they be bothered about your fees being a bit higher?

Once you know if you are winning your fair share of instructions, then you do have a choice to make. If you believe this part of your process is working, then unless you are prepared to invest in marketing, you will find it very difficult to grow the number of valuations you are asked to undertake. And unless you can grow this, your fixed costs will prevent any kind of decent profit.

So really you need to figure out if your processes are competitive and so are worth scaling up. As then your fixed costs will feel much more manageable.

[jammy-git]

EddieSteadyGo said:

jammy-git said:

Why not go to online only, but with a local presence?

That's like the worst of both worlds. All of of the same overheads but at the same time having to charge lower fees in order to competitive in the on-line world.

I meant get rid of the shop, work from home or a co-working office but still offer viewings, etc to the local area.

[EddieSteadyGo]

jammy-git said:

EddieSteadyGo said:

jammy-git said:

Why not go to online only, but with a local presence?

That's like the worst of both worlds. All of of the same overheads but at the same time having to charge lower fees in order to competitive in the on-line world.

I meant get rid of the shop, work from home or a co-working office but still offer viewings, etc to the local area.

That would be like cutting off a left leg. The shop and its physical presence (I would guess) is the business's main form of advertising. People see the shop and call up to make an appointment to get a valuation from their local estate agent.

Removing the shop would require it to be replaced with other form of marketing. And that would be risky. All in imho

[jammy-git]

EddieSteadyGo said:

That would be like cutting off a left leg. The shop and its physical presence (I would guess) is the business's main form of advertising. People see the shop and call up to make an appointment to get a valuation from their local estate agent.

Removing the shop would require it to be replaced with other form of marketing. And that would be risky. All in imho

So how do online estate agents get business?

[EddieSteadyGo]

jammy-git said:

EddieSteadyGo said:

That would be like cutting off a left leg. The shop and its physical presence (I would guess) is the business's main form of advertising. People see the shop and call up to make an appointment to get a valuation from their local estate agent.

Removing the shop would require it to be replaced with other form of marketing. And that would be risky. All in imho

So how do online estate agents get business?

They use other forms of marketing. Like facebook, adwords, youtube, display marketing, twitter etc etc etc. .

[jammy-git]

It was a statement more than a question. My point was that an estate agent will need to do all those forms of marketing regardless. Without the overheads of a shop, it frees up more money to increase those marketing efforts.

[EddieSteadyGo]

jammy-git said:

It was a statement more than a question. My point was that an estate agent will need to do all those forms of marketing regardless. Without the overheads of a shop, it frees up more money to increase those marketing efforts.

In all honesty, I really don't think most single branch estate agents will be using the forms of advertising I mentioned to any serious degree.

Putting aside the cost, it is difficult to get the necessary geographic precision to target perhaps a 5 mile radius which a small estate agent might want to target.

This is where the on-line guys win because they pretty much have a national coverage.

[mike74]

I'd definitely bail out now if you're an estate/lettings agent and already finding yourself struggling... once the lettings fees ban comes into effect and that particular money for nothing gravy train grinds to a shuddering halt you (and plenty of others) really will be screwed.