Advice for investing in local company

Malky

oldtoolie wrote: »

A one truck business that does nothing but buy wholesale products and resells them? Does the business add any value to the product? What would stop a competitor offering the same product at a 10% discount and stealing all the customers? It might not be nice but what is to stop you or a work colleague from doing that?

We have another bigger truck but it is leased. I know what you're saying as it does happen in every business where someone will come in and undercut. Some customers come back and forth. They buy from us for a while then go elsewhere when someone undercuts us. In most cases, said customer does come back when they start getting let down elsewhere. We add value to our products by offering a top notch service. Sometimes a great service isn't enough and it comes down to cost but we rarely let any customers down and that helps. Other than the current directors/owners, I can't see any of my colleagues branching out on their own.

Glen_Clark

oldtoolie wrote: »

A one truck business that does nothing but buy wholesale products and resells them? Does the business add any value to the product? What would stop a competitor offering the same product at a 10% discount and stealing all the customers? It might not be nice but what is to stop you or a work colleague from doing that?

Must be more to it than buy wholesale products.. must be a wholesaler... maybe go to China, pick what sells and source direct. Not every Pound Shop/Gift Shop owner, or wholesaler, can do that. But yes, if there if it can be easily copied the business isn't going to be worth much more than its assets once its buyers have retired.
The guy who built up Poundland said the main reason for its success was its buyers - I guess the business wouldn't be worth much without them

somethingcorporate

If they buy on and sell and add no value then it's unlikely a sustainable business model.

This is going to be harsh but evidently you've not got much of a clue - you've listed the companies assets but that is only half of the balance sheet and nothing of what you have suggested would tempt me to put £10 into the company let alone six figures.

Sounds like you could be buying into something that could capitulate very quickly, taking your money with it.

If they had £500k of debt do you still think that the company would be worth £1.2m? I'd get some good, paid for advice because you need it.

innovate

JohnRo wrote: »

I know nothing but it does sound like a tragedy in the making.

Post number 6 in this thread. Perhaps not such a bad assessment.

ChiefGrasscutter

Check for hidden potential liabilities. By this I mean guarentees offered that may suddenly end up being called in en-mass.
Seen some multi-£m takeovers kebbabed by this factor (discovered after all signed and sealed of course!).Trouble is without a lot of professional grade investigation it is difficult to find out.

Russe11

What do they do, that you could not take your investment and start doing it yourself?

Thrugelmir

Russe11 wrote: »

What do they do, that you could not take your investment and start doing it yourself?

If only it was that easy.

westy22

somethingcorporate wrote: »

If they buy on and sell and add no value then it's unlikely a sustainable business model.

You had better let Amazon know that

Thrugelmir

westy22 wrote: »

You had better let Amazon know that

They incurred 7 years of losses before generating a profit. By then their annual turnover was in excess of $1 billion. So deep pockets required to replicate their model.

greenface

Outgoing want to reduce and other two want to increase . Are we all 20% directors and with all the same input & output with decisions being shared equally ? What if the 2 big named directors or their family want to start up their own business taking their good name elsewhere? You know who you work for best but this can/could happen ..