I know quite a few people on here run their own business, thinking of taking the plunge and buying an existing business. What advice do people have regarding doing the books? Is it easier to outsource or is it straight forward to learn and pretty good with numbers. Any other tips?

I used to have my own business. It was only small, I was a sole trader. I did my own books throughout the year then handed my completed accounts to an accountant at the end of the year. Probably could have dealt with the taxman myself but couldn't be bothered and it wasn't very expensive considering the form filling it saved.

If you're buying an existing business, do make sure you investigate the financial side fully before taking the plunge. Get a good accountant on board to conduct a due diligence to ensure you stand a good chance of recovering your investment.....

 

Maintaining the books is easy, depending on the size and complexity of the business... Then I would say that having once been a tax manager in an accountancy practice - although I have been away from public practice for 9 years now:wink:

 

I'll PM you my number if you would like to discuss it sometime,

 

Good luck Anthony,

 

Richard:thumbup:

You wont go far wrong mate speaking to Richard about the books and business.

 

I would also add, it depends on the type of business you want to buy, is the established business reliant on the current owners status in the grand scheme of things, goodwill, client base etc.... Or would you benefit from starting a fresh and growing in the same field.

 

Working for yourself does have its pro's and cons, but can be far more rewarding, not just financially than working for a company.

Hi Anthony

 

From personal experience I would say it's best if it's a limited company and you pay yourself a minimal salary and pay tax and NI on it. The rest you can take as dividends.

 

I've just a huge problem with the powers that be because I went slf employed for 6 months, and then went back to a salaried basis. They didn't like that at all !

 

Best of luck with it mate, You deserve some. Follow Richards advice in the end, he got the experience

Thanks guys, the business is small and very cheap, basically we end up with a long established shop property and reasonable location and the equipment/setup. The owner is retiring and I think with an injection of effort there is a lot more it can do to bump up the turnover. Currently runs at a 38% gross profit so don't know the nett profit yet, the business is something the wife loves doing and is very good at, she just needs that push to go for it and I think an established business is easier than going from scratch. TBH we probably don't need the hassle at the moment but these things seldom come along at the right time but long term it could be good.

What's the turnover currently?

What's the turnover currently?

 

About £70k but they seem very tradional even closing for lunch! I think with some effort using internet/shows/social media we could bump that up. The wife is trained in the skill but also does other types of it as well to increase the product base we could offer

Go for it then !

About £70k but they seem very tradional even closing for lunch! I think with some effort using internet/shows/social media we could bump that up. The wife is trained in the skill but also does other types of it as well to increase the product base we could offer

 

Yeah, e-marketing and pro-activity will boost if they're not activities the incumbent has performed. Have you got savings and/or additional income? 38% gross with a turnover of £70k isn't a lot. Good luck though, I'd love to run my own business. :)

We would look to borrow from parents and maybe against the house, the business is only up for £24,950 which is a lot of money but not a lot for a business if that makes sense? We may and go and have a look at it this week.

When I started on my own I did my own books and then paid an accountant to do the HMRC bit and make sure it all added up. I think it cost about £900 for the first years business. I used an accountant who specialised in small businesses and sole traders - This I am sure kept the cost down. Now I have a larger accountancy do the books each month as the business has expanded since I started it three years ago. Just don't underestimate the amount of unpaid hours you are going to put in - I reckon I do two jobs worth even now. But you get so much satisfaction when it gets going and you start to make money. And also, your boss ain't getting any of the profits from the work you put in, as you will be the boss! :)

This sounds really good for you Anthony....... About time something good came along for you and your family.....

All the best....

Russ

If you (or anyone else) needs any help on the tax side of this, give me a shout - I know a thing or two about that aspect of things... :whistling:

So spoke to the woman owner today and we are going to see her and her husband who does the books on Saturday. Strangely the website we saw it on isn't the one they listed it on, the price is incorrect £30k not £25k but the turnover is much higher than the £70k listed so guess that balances out. So I'm guessing a Ltd company is better with Kerry and myself as directors?

So next step once we've had a look and are happy is a business plan and the hard work of raising finance !!!

So spoke to the woman owner today and we are going to see her and her husband who does the books on Saturday. Strangely the website we saw it on isn't the one they listed it on, the price is incorrect £30k not £25k but the turnover is much higher than the £70k listed so guess that balances out. So I'm guessing a Ltd company is better with Kerry and myself as directors?

So next step once we've had a look and are happy is a business plan and the hard work of raising finance !!!

 

Good luck Anthony.... With £70k turnover and 38% GP, that would have only left £26-£27k to cover overhead expenses and your wife's own wages; so I hope the new figures stack up mate!!

 

As said, do feel free to call me if you'd like any advice:wink:

 

Richard:thumbup:

You might want to discuss a tie in on profits with the owner, in that they continue working with you in an advisory capacity or stage payments based upon an agreed period of handover, this will bring to light any issues that may have not been discussed or declared such as toxic debt, unresolved supplier/ creditor issues or more likely a drop off in business that the financial information did not show but the owners new about, which may have affected the business.

 

Look out for other similar traders opening up or already trading nearby (not always a bad thing as it can draw in new buyers looking for simlar products), speak to suppliers if relavant as a loss of a main supplier could affect your supply of goods or the margins you make, and be sure there are no outsanding issues with an existing customer/suppliers.

 

Of course good due diligence and a well written legal contract should leave you with protection against these possible issues, but you want to be sure the company can perform to the level you have been told and the current owner may wish to stay in touch to ensure you are running it properly to protect his full settlement of the purchase.

 

Also make sure the books show a steady growth, not a decline in profit and is not based on one good year for the basis of their vaulation.

 

Accountants vary and shouldn't be charging more than £600-£800 for their annual services (plus Vat) however if you want to simplify the process of bookeeping then consider using Kashflow or Zero they are excellent packages designed for every type of business including online store processing, stock control. However very simple to use and with great support.

 

For extensive information on running a business and servcies that you can get, consider the FSB (federation of small business) www.fsb.org.uk or the governments own site https://www.gov.uk/starting-up-a-business formerly business link.

 

Finaly love the business, it will ask all of your time, won't care about your emotions, will ask for everything you have...but when it's ready to give, it could change your life!!

 

Good Luck, hope it all works out.

^^^^

 

Very good advice there Steve:bow:

Also iff raising the finance is a big stumbling block then ask about a lease/buy....I have my own company and i heard about another roofing company for sale in another area years ago,anyway ended up buying it with a similar structure to lease/buy and have doubled my catchment area and customer base. Dont be affraid to talk and ask the current owners all options available as at the end of the day its all buisness and you would be very surprised at the unorthadox but legal deals ive done in the past which were not really mainstream ideas but it worked....Goodluck anyway bud as you,ve been through a shocking time as of late.

It's a good point from znut, funding a business can come in all forms, although be very careful that it's not going to stretch your finances in the worse case scenario (failure)! Recommend that you don't bring in family, if it goes South it can test the most loyal of relationships, instead perhaps consider a shared equity buyout...you pay the owners £X for a first phase buy out, when the business returns the profits you have been told to expect, plus the extra generated from your own efforts and ideas, you can pay off the addtional balance with profits intrest.

 

Your seller, will prove that the business was financialy strong as he said it would be, will be able to help you out initialy with a smooth transition and get paid his money with some additional profit share, whilst you don't have to raise/ outlay all the funds immediatley.

 

Consider all options, don't guaruntee any of them on your property.

Thought I'd update you all......

 

We didn't buy that business, another came up for sale in the place I was born and grew up in so loads of family ties and friends there! The business was 40% cheaper! rent was 60% cheaper with only a 5 year lease instead of 17! Turn over is about the same so a much better bet. The wife was approved for the finance today so we are looking to take over 1st Feb, the wife is going sole trader for a year just to keep things simpler while we get used to running a business. Also should just be able to scrape under the VAT threshold. So if your guys need to send the wife flowers we will have Interflora so anywhere in the UK or getting married lol!

Well done mate, sounds like a great start to the New Year.

 

Good luck with it all and I'll keep the flowers in mind!

Great news! Your both going to be fine with this, you learned the first rule of business, don't let your heart rule your head and waited for a better deal to come along.

Differentiate yourself from the supermarkets and street sellers, lots of displays outside if possible and plan the celebration periods.. New year, new start and the very best of luck to you both. .

Well we picked now as valentines is very soon followed by Mother's Day! A creation she made for the counter display..

Edited January 6, 201411 yr by Anthonyd

It's nice that you use some unusual flowers and foliage. Sets you apart fron the bog standard roses n chrysanthemums !

It's nice that you use some unusual flowers and foliage. Sets you apart fron the bog standard roses n chrysanthemums !

 

She loves contemporary but does traditional as well, by the way that's all artificial ! She does that as well