Running your own business Good or Bad
 

Hi thinking about buying a small bike business :eureka:and just thought I would ask if any one on here runs there own business: and if so what they thought about it and can they recommed it?

Thanks Matt:puzzled:

Make sure you have plenty of cash to start with and be prepared to lose everything.

Working for yourself can be very satisfying, and you'll never want to work for anyone else.

You'll probably work longer than you've ever worked, for less than you've ever earnt - but ultimately if it all works out, you could reap the rewards.

The bike business is incredibly fickle. I've seen 7-8 shops open and close in my locality in 7-8 years. Only the very good and the big remain!

I started a shop 8 years ago with £7000 and 12 months later I went bankrupt for 5 times that!! What I should have started with was £40,000 min - but the temptation to own my own shop was too great and I rushed into it, made some bad decisions and have pretty much paid for it ever since.

However, my mechanic took over the workshop area (for 10% of the rent I was paying) and he's created a great little business and has a first class reputation - but it has taken over his life and he spent the first 5 years telling me on a weekly basis how he wanted to quit. Now he's established though and has recently expanded.

I definately want to have my own business again one day, but will use my previous experience to ensure I don't feck it all up again!

Good luck, I hope it works for you.

:)

I deal with loads of small businesses as an accountant so give us a shout if you need any start up advice.....

It's stressful! But you get more freedom with working hours. You still have clients to answer too, but other than that, being your own boss is nice.

Best thing I ever did 10 years ago, now got a business with a very good turnover and great margins with low costs and I only work 3 days a week.
If you are thinking of buying a business get your accountant to look at the last 3 years accounts to see what profit is being made, how sales are going ( up or down), margins being made, how many years left on property lease / rent and what is the stock worth in the real world. You could find the stock is valued in his books at £20,000 but only worth 1/2 of that. Is the price being asked for the business realistic to profit being made. As a rule of thumb never pay more than 2 1/2 times EBIT. ( Earnings before interest and tax ) Most important of all, what cash flow will you require to run the business in the first 12 months.
Also try and find out why he is selling.

Running my own busines is certainly the best thing i ever did work wise, but be prepared for a lot of hard work for very little reward at first, and some grief and long hours along the way along the way to get it going.

Preparation, cold hearted objective research before you start are crucial. Then seriously consider cashflow, proper funding and don't be over optimistic. Always preapre an optimistic, realistic and doomsday/pessimistic set of projections and budgets and consider 'what if'

I was once told that for the first year you keep the business, in the second year it begins to keep itself, and in the third year it starts to keep you, and these words were very apt in my experience.

Get good advice from an accountant and a solicitor if invloved in any sort of partnership. Also consider the long term implications of long term leases and things like the bank wanting say your house as security.

Employing staff can be interesting as well.

I've also been told that something like only 1 in 10 new start ups survive to reach the 5 year mark. Sorry if that sounds depressing, but business failure can bring massive grief.

Having said all that negative stuff, if everything is right, it'll be the best thing you've ever done, rather than a nightmare.

I've only concentrated on the negative stuff to try and help you avoid some of the pitfalls.

GOOD LUCK.

Scarily I agree with Dom !

I always advise people to take no money from their new business for a whole year ! Most can't do this and fail because of it. A new business needs all the money it can get and more. There are always expenses you didn't allow for and in the first few years trade will be up and down as your name gets known in your chosen field.
Always have savings for the times trade is slow and always be prepared to work long hours. Be prepared for stress and lots of it. Listen to every bit of advice from those that have actually done it, dismiss it if you want but always listen first.
It's always better to do what you know as well, it's harder learning a new job whilst also learning how to run a business.
Banks and business advisors always try to get you to borrow money, my advice is the opposite try and do it properly whilst owing no one. That way when trade is slow you don't have payments to make.
On the plus side you don't answer to anyone and done right you should make good money. Not all businesses make you a millionaire tho LOL

Good Luck :)

Steady on, that's almost twice in one day and on 2 forums!!

;):lol:

Ive been running my own business for just over a year now. Iver managed the same lifestyle at previously and am also just about to move in to a bigger house with my GF.
I found thart coming from an Office job to working alone can feel very lonely sometimes. No work mates to have a laugh with. But at the end of the day having your own business is very rewarding.

Thanks guys,its a very scary thought leaving a job to go into the unknown.:puzzled:At least the company has been running for three years and making money so just need to improve it!!!!!

Will let you know how i get on and what I decided to do:puzzled:

Thanks for the offer ozz.

Matt :burn:

We started a phoenix company from one that went phut in 1999 and its hard work but very rewarding, just getting to the stage where we need bigger premises and more folk. Having been responsible for ten other peoples income and well being previously I can tell yo thats the worst bit. We have found that using specialist consultants/sub contractors for evrything is the cheapest way, dont spend vast amounts of money on new furniture & fixings you can get used stuff at a fraction of the cost.

Above all I will do my best not to work for someone else ever again despite only having had two one week holidays a year for nearly seven years.

Good luck

Sometimes you just have to weigh up the costs. You might get job satisfaction; you might even earn a lot more money. You might even be able to retire early leaving some one else to run the business and take directors cut. But you will always have the burden on your shoulders that the buck stops with you. You have the responsibility of making sure every one is paid including your creditors.

Then there is the taxman, he wants you to pay him 50% of last years tax bill paid in advance. Then the following year if you didn't hit the same profit margin, he will let you have some of it back. If you are late in paying, he wants to charge you interest. He wants to look through all of your accounts and if he does see that you have claimed anything that is not a business cost, he treats you like an axe murderer.

Then there is the Vat man. You really don't want to mess with this guy. He can send the bailiffs round and clear you home of everything of value to clear the debt. Remember if you fail to pay your tax bill, its tax avoidance. Fail to pay the Vat man, its fraud.

Then there's sickpay, holiday pay, this is what you will have to pay, not get paid. Nic contibutions, maternity leave. insurance, public liability, security.

But it’s a great life really
:sing:

[Edited on 14-3-2006 by Jon]

Go for it!! I did ;)

The satisfaction of knowing you're doing it all by your self is priceless. Concentrate on keeping the business running and turning over. If you need any help with accounts, advertising etc. no matter how much you think you know or think you can do, ask someone or pay someone to do that for you. Concentrate purely on what you know and nothing more.
You need to be prepared to work every hour god sends, and work every one of them as hard as possible. You won't make any money for at least a couple of years. I still only draw as much as I need.

The words of wisdom from Jon on the tax man and VAT man are well worth taking on board.

The only thing I'd be sure of with taking on an established business, is that the existing customer base will keep coming to "you". Many small businesses do what they do because of who runs them, not because they offer this or that.

I have been self employed for over ten years....and one thing i have learnt is that the only real mistake is the one you dont learn from.
good luck ;)

I'm convinced, spoke to the guy today and made him an offer,which he has accepted.

:bouncy:

So on my way to poverty and late nights by the sound of it!!!!!!!!!

:sing:

Thanks for all the reply guys will keep you informed of the progress

Matt

Good luck Matt, I hope it works out for you :D

Blimey good luck!

Good Luck. I've been doing it for 15 years. Not always easy but worth it in the long run for me. Motivation can sometimes be a problem and keeping up with rules and regs but with the right thinking it's much better than 9-5 for me :)

Any one know of a good solicitor for business purchases:frog:

Matt

Only one in my area which is quite a way from you.

The offer of any help with the set up etc is still there - and free!