where to start? Owning a business
Discussion
Hi all,
Myself and Mrs C have become aware of a local independently owned shoe shop that is coming up for sale in the near future. The shop has been in the same family for years and has a good reputation locally. There are redundancies coming up in Mrs C's work and she fancies a career change, she is an accountant. Neither of us have any retail experience, were would we start with running our own business?
Myself and Mrs C have become aware of a local independently owned shoe shop that is coming up for sale in the near future. The shop has been in the same family for years and has a good reputation locally. There are redundancies coming up in Mrs C's work and she fancies a career change, she is an accountant. Neither of us have any retail experience, were would we start with running our own business?
If your missus is an accountant, I'd have thought she'd have some idea of what is involved in running a business, as well as the initial due diligence queries and considerations.
But as others have said, retail is very different to a corporate career, so you may want to dip your toes in the water first.
But as others have said, retail is very different to a corporate career, so you may want to dip your toes in the water first.
Old couple near us tried flogging their bike and toy shop after 40 years in business. Not a whisper.
6 months after they closed, someone rented the retail unit 3 doors down and set up a bike shop.
My point is. What is stopping you opening a shoe shop next door? Why wouldn't you ?
ie don't overvalue the goodwill or the stock they have.
6 months after they closed, someone rented the retail unit 3 doors down and set up a bike shop.
My point is. What is stopping you opening a shoe shop next door? Why wouldn't you ?
ie don't overvalue the goodwill or the stock they have.
The only independent retail businesses near me which actually make money are those where they own the premises from which they operate. Else all is chains and the vanity projects of silly wimmins selling Nick nacks, which they can only afford to do because a rich hubbie is bankrolling them
The biggest issue with this sort of acquisition is that vendors tend to have pie in the sky ideas on the value of their business. You need to sign an NDA and have a very good look at the accounts, then offer them what you think it is worth. This is likely to be very different from what they think it's worth, depending on how long the business has been for sale, this may be the end of the conversation. If the property is leased then you will definitely want to seek professional advice about this as commercial leases are a real minefield for the inexperienced. I'd also want to fully understand why they are selling...
I'm no expert, but i'd be sceptical of the future prospects of the traditional high street shoe shop. I haven't been in one in years. Supermarkets now offer very good ranges of shoes, at incredibly low prices. The only exception may be the more niche, high end products, which people will go to more effort and expense to find, but this comes with it's own problems of carrying lots of high value stock.
The fact that your wife is an accountant will obviously be a big help in terms of the day to day management, but just understanding how a business works is not always the same as understanding why it works. Does she have any product or retail experience? If she doesn't then i'd think carefully as buying a business is not just like taking a job in a new area, you can't just easily call it a day and go back to being an accountant if it turns out not to be what she was hoping. She'll have to be getting her head round a whole new industry, whilst managing part time, low wage staff, who, unless she's very lucky, will come and go regularly.
I would be surprised if you can earn anything close to a decent accountant's salary from running a traditional shoe shop, but as I said, I'm not expert. She'll also probably find herself working longer hours, and lots of Saturdays, which would be a big downside for me, particularly if you have kids.
It's a big commitment, with a lot of risk. Could your wife not find a career where she can use her existing skills in a new environment? That would seem a less risky option, but then sometimes it's healthy to take a risk!
Best of luck in whatever she chooses to do.
I'm no expert, but i'd be sceptical of the future prospects of the traditional high street shoe shop. I haven't been in one in years. Supermarkets now offer very good ranges of shoes, at incredibly low prices. The only exception may be the more niche, high end products, which people will go to more effort and expense to find, but this comes with it's own problems of carrying lots of high value stock.
The fact that your wife is an accountant will obviously be a big help in terms of the day to day management, but just understanding how a business works is not always the same as understanding why it works. Does she have any product or retail experience? If she doesn't then i'd think carefully as buying a business is not just like taking a job in a new area, you can't just easily call it a day and go back to being an accountant if it turns out not to be what she was hoping. She'll have to be getting her head round a whole new industry, whilst managing part time, low wage staff, who, unless she's very lucky, will come and go regularly.
I would be surprised if you can earn anything close to a decent accountant's salary from running a traditional shoe shop, but as I said, I'm not expert. She'll also probably find herself working longer hours, and lots of Saturdays, which would be a big downside for me, particularly if you have kids.
It's a big commitment, with a lot of risk. Could your wife not find a career where she can use her existing skills in a new environment? That would seem a less risky option, but then sometimes it's healthy to take a risk!
Best of luck in whatever she chooses to do.
Have a look here:
http://www.daltonsbusiness.com/buy/retail-business...
Gives you an idea of the sort of turnover/profit they're allegedly making. Personally, I'd shed a little tear every time I had to open up the place in the morning.
http://www.daltonsbusiness.com/buy/retail-business...
Gives you an idea of the sort of turnover/profit they're allegedly making. Personally, I'd shed a little tear every time I had to open up the place in the morning.
That sounds more promising. Children grow quickly and school uniform rules mean shoes have to be of a certain type. Presumably the shop is on the local schools register of approved uniform suppliers?
Also opportunity for girls party shoes as youngsters are always attending birthday parties
Also opportunity for girls party shoes as youngsters are always attending birthday parties
Inkyfingers said:
The biggest issue with this sort of acquisition is that vendors tend to have pie in the sky ideas on the value of their business. You need to sign an NDA and have a very good look at the accounts, then offer them what you think it is worth. This is likely to be very different from what they think it's worth, depending on how long the business has been for sale, this may be the end of the conversation. If the property is leased then you will definitely want to seek professional advice about this as commercial leases are a real minefield for the inexperienced. I'd also want to fully understand why they are selling...
I'm no expert, but i'd be sceptical of the future prospects of the traditional high street shoe shop. I haven't been in one in years. Supermarkets now offer very good ranges of shoes, at incredibly low prices. The only exception may be the more niche, high end products, which people will go to more effort and expense to find, but this comes with it's own problems of carrying lots of high value stock.
The fact that your wife is an accountant will obviously be a big help in terms of the day to day management, but just understanding how a business works is not always the same as understanding why it works. Does she have any product or retail experience? If she doesn't then i'd think carefully as buying a business is not just like taking a job in a new area, you can't just easily call it a day and go back to being an accountant if it turns out not to be what she was hoping. She'll have to be getting her head round a whole new industry, whilst managing part time, low wage staff, who, unless she's very lucky, will come and go regularly.
I would be surprised if you can earn anything close to a decent accountant's salary from running a traditional shoe shop, but as I said, I'm not expert. She'll also probably find herself working longer hours, and lots of Saturdays, which would be a big downside for me, particularly if you have kids.
It's a big commitment, with a lot of risk. Could your wife not find a career where she can use her existing skills in a new environment? That would seem a less risky option, but then sometimes it's healthy to take a risk!
Best of luck in whatever she chooses to do.
I own several businesses - this (above) is excellent advice. Take it.I'm no expert, but i'd be sceptical of the future prospects of the traditional high street shoe shop. I haven't been in one in years. Supermarkets now offer very good ranges of shoes, at incredibly low prices. The only exception may be the more niche, high end products, which people will go to more effort and expense to find, but this comes with it's own problems of carrying lots of high value stock.
The fact that your wife is an accountant will obviously be a big help in terms of the day to day management, but just understanding how a business works is not always the same as understanding why it works. Does she have any product or retail experience? If she doesn't then i'd think carefully as buying a business is not just like taking a job in a new area, you can't just easily call it a day and go back to being an accountant if it turns out not to be what she was hoping. She'll have to be getting her head round a whole new industry, whilst managing part time, low wage staff, who, unless she's very lucky, will come and go regularly.
I would be surprised if you can earn anything close to a decent accountant's salary from running a traditional shoe shop, but as I said, I'm not expert. She'll also probably find herself working longer hours, and lots of Saturdays, which would be a big downside for me, particularly if you have kids.
It's a big commitment, with a lot of risk. Could your wife not find a career where she can use her existing skills in a new environment? That would seem a less risky option, but then sometimes it's healthy to take a risk!
Best of luck in whatever she chooses to do.
Childrens' shoe shops are in a slightly different category in my town - in that they seem to do rather well.... mothers prefer their kids to try the shoes on etc and are always buying new school shoes for the growing kids.
Talk to the owners, see if they want to engage - they'll provide the NDA. 3 years of accounts etc. I'd be happy to take a peek at the P&L's and sign an NDA if it would help. But your wife is a qualified accountant she'll know...
But, as above, it's highly risky on the high street - despite the kids shoes angle.
Some quick points - as someone who has done exactly what you are planning to do here is my XP.
Don't overpay. It will be overvalued.
Turnover means nothing.
Any hidden expenses - if you cant find any fudge 10-20% for them!
Research the people, (on the QT!) their house, car, general reputation.
Any other businesses? Repeat as above.
Fall back plan?
How are you buying? Cash or loan?
Dealing with the public is a PITA!
Home / work life will never be the same.
Not even touched on competitors, tax, insurance, pensions, rates, vat, utilities, e-commerce, stock, finance, banks, card payments etc etc... all of which are subjects on their own.
Don't overpay. It will be overvalued.
Turnover means nothing.
Any hidden expenses - if you cant find any fudge 10-20% for them!
Research the people, (on the QT!) their house, car, general reputation.
Any other businesses? Repeat as above.
Fall back plan?
How are you buying? Cash or loan?
Dealing with the public is a PITA!
Home / work life will never be the same.
Not even touched on competitors, tax, insurance, pensions, rates, vat, utilities, e-commerce, stock, finance, banks, card payments etc etc... all of which are subjects on their own.
Local family in Poole have run what appears on the face of it a very successful shoe shop for many years 20+
I received an email from the agents asking for offers on their shop and flats above.
After having a chat with the owner he explained that he had been loosing money or just about breaking even for the past 5 years but that as he employed his family, he felt bad closing.
He is retiring and letting his daughter go online with the business.
I agree with what's been said above. You need to look very carefully at the business and the accounts.
One additional thing I would mention, childrens shoes and school uniforms are indeed profitable but the likes of Tesco, Asda etc have all cottoned on that parents are happy with a cheap pair of shoes for little Johnny as he will wreck them in a few weeks anyway.
I think that the parents willing to pay for decent Clarks shoes are much thinner on the ground nowadays.
I received an email from the agents asking for offers on their shop and flats above.
After having a chat with the owner he explained that he had been loosing money or just about breaking even for the past 5 years but that as he employed his family, he felt bad closing.
He is retiring and letting his daughter go online with the business.
I agree with what's been said above. You need to look very carefully at the business and the accounts.
One additional thing I would mention, childrens shoes and school uniforms are indeed profitable but the likes of Tesco, Asda etc have all cottoned on that parents are happy with a cheap pair of shoes for little Johnny as he will wreck them in a few weeks anyway.
I think that the parents willing to pay for decent Clarks shoes are much thinner on the ground nowadays.
I have a retail shop as part of our business, although it actually accounts for a small percentage of the overall picture.
The vast majority of customers are lovely, and pleasant to deal with. Some though are a right royal PITA. Unfortunately, with companies like Next offering services where you can order up to 10pm and still get your goods the next morning, customers now expect 24/7 service. They expect you to be open on Sundays, they expect you to be open early, and open late. They expect the prices in your shop to be the same as what they see at competitors online...
The problem is, those things aren't viable to the small business. What you have to pride yourself on is service. Offer the best service, the friendliest smile, the most pleasant facilities, whilst also keeping your stock clean and well presented, and your staff even more so.
The vast majority of customers are lovely, and pleasant to deal with. Some though are a right royal PITA. Unfortunately, with companies like Next offering services where you can order up to 10pm and still get your goods the next morning, customers now expect 24/7 service. They expect you to be open on Sundays, they expect you to be open early, and open late. They expect the prices in your shop to be the same as what they see at competitors online...
The problem is, those things aren't viable to the small business. What you have to pride yourself on is service. Offer the best service, the friendliest smile, the most pleasant facilities, whilst also keeping your stock clean and well presented, and your staff even more so.
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