Just started a new business six months ago - quick rant

motorguy

Murphy_The_Cat wrote:

Hi Chriz

The number of something that you sell has got absolutely nothing to do with anything - the only thing that counts is the money that you make out of it.

17% of £10000 is only £1700 per month profit - and then rent, utilities, bills, rates, insurance etc has to come from that figure - whats that going to leave?
£1000ish per month income between 2 people (the OP refers to we) is less than £116 each BEFORE tax & NI.

ask yourself the question, is this worth doing ? or does the OP have a plan to make the business worthwhile ?

MTC

I think you made a lot of assumptions about us and our business based on two or three lines of background information that i had put in my original post.

i said our credit limit was 10K, we have other sources of revenue in the business other than just buying and selling, and also, we have other methods of paying for stock that we do purchase, although we have a preference in using the company card.

Also the business is only in its forth month of trading. Our accountant has just checked our figures and we are averaging 23% profit on our retail sales.

We also have built quite a strong service and support income (you've probably gathered by now this isnt a corner shop as a tin of beans doesnt really need much support)

The 'we' is myself and my wife - she works as a business manager for a large corporation and isn't and won't be drawing a salary from our business. We have one full time employee. Currently i don't need to take a wage from the business but i expect to be able to within the next six months.

I think this is a fairly normal situation for a startup business - i think you;d have be fairly naive to expect to be on top of the world from day one. Rome wasn't built in a day, but we are getting there.

motorguy

Murphy_The_Cat wrote:

Hi Chriz

The number of something that you sell has got absolutely nothing to do with anything - the only thing that counts is the money that you make out of it.

MTC

Thats just plain wrong. If you have something that you can sell at a profit, in our case a 23% profit, then the more you sell the more money you make.

Tescos make probably 3pence on a can of beans, but its the fact that they sell a LOT of them that makes it worthwhile

motorguy

grahamh wrote:

Not a lawyer, but if your tenancy agreement comes under the Landlord and Tenant act (and you would have had to make a sworn declaration if it does not) then it is my understanding that the landlord cannot evict you at the end of your lease. He must re-let it to you at a reasonable price. This is enforceable by law. The only exception to this is if the landlord is going to use the premises for his own trading.

Of course the landlord may sell the premises but then your agreement would be with the new landlord and the same would apply. The danger being that they would want to use the premises.

Thats the loophole, the prospective new landlord - if we didn't buy it - did want to use the premises themselves.

As it happens we've just heard our landlord is now not selling the premises, so the pressure is off us on that front.

motorguy

chriz1000 wrote:

about your situation, it does sound like very unfortunate circumstances.
Did you go through a solicitor when signing the lease? If so they should have brought certain clauses to your attention, a one year lease is very short. I expect my new business to be only just reaching its target potential after the first year. A solicitor should ensure that safe guards are in place. My solicitor insisted on a clause stating that rent reviews were every 5 years and the rent could only be increased by a maximum of 2.5% PA.
Perhaps if you do end up moving premises it would be worth getting a decent solicitor on side to ensure nothing like this happens again.

The one year lease suited us as it was a complete startup and we didn't want to commit to say a three year lease only to find we couldn't make the business float.

Plus the premises were pretty much ideally situated for us

But yes, we definitely will take on board what you are saying about using a solicitor should we move...

motorguy

helen_vasey wrote:

we have just got ourselves a sainsbury's credit card for our initial stock outlay, it's interest free for 10 months. I can't understand the banks' attitude, especially when you have the orders, you just wait, when the money is rolling in they will be falling over themselves to lend you money. why do they want to lend you cash when you don't need it but when you are struggling, they don't want to know??? you have my sympathy on the shop front, we decided against one beacause the charges are soo high! we would need £500 per week in sales just to run a small, out of town-centre shop.

Thanks for the empathy Helen, you've hit the nail on the head with the banks attitude!!

motorguy

grahamh wrote:

Not a lawyer, but if your tenancy agreement comes under the Landlord and Tenant act (and you would have had to make a sworn declaration if it does not) then it is my understanding that the landlord cannot evict you at the end of your lease. He must re-let it to you at a reasonable price. This is enforceable by law..

there are definitely some useful points here that i didn't know - much appreciated!

Murphy_The_Cat

pgilc1 wrote:

Thats just plain wrong. If you have something that you can sell at a profit, in our case a 23% profit, then the more you sell the more money you make.

Wow, thats amazing

PoorDave

Murphy_The_Cat wrote:

Wow, thats amazing - I'd never thought of that.

What's lesson #2 - learning the difference between 17% profit & 23% profit ?

Tell you what, don't bother answering.
I wouldn't want such a successful trader as yourself wasting his time talking to complete wasters who were just trying to help you.

MTC

Trying to help by making statements that made it sound like you knew far more about the OP's business than they did, rather than sticking to answering the question asked, then adding anything you think will also help in a pleasant way, isn't really that helpful to anyone, but hey.

Murphy_The_Cat

PoorDave wrote:

Trying to help by making statements that made it sound like you knew far more about the OP's business than they did, rather than sticking to answering the question asked, then adding anything you think will also help in a pleasant way, isn't really that helpful to anyone, but hey.

PoorDave
& your help / contribution on this thread was what exactly ????

The OP never asked any questions - he just had a rant over various points.

TBH, I don't know why he put the post up in the first place (& now I care even less).

cheerio

motorguy

PoorDave wrote:

Trying to help by making statements that made it sound like you knew far more about the OP's business than they did, rather than sticking to answering the question asked, then adding anything you think will also help in a pleasant way, isn't really that helpful to anyone, but hey.

Thanks Dave, yourself and several others were supportive and gave good advice for our situation as it was at the time, and it will be most useful for the future.

Cheers

Paul