Buying a business

BunnieJ

The company I currently work for was taken over and I TUPE'd across. I was told I basically had no choice but to go to the new company or I would lose my job, so I'm guessing that depends on if he let's his staff go before the sale?

I haven't seen the accounts yet, but I don't think the business can sustain 2 members of staff, so even if they TUPE across I'll have to let them go due to lack of funds :-(

Hopefully if the business was doing well enough that I could afford to hire staff then I would, but that's opening a whole new can of worms!

This is all speculative as he may already have secured a buyer.

Savvy_Sue

BunnieJ wrote: »

The £3k is to purchase the business (which includes all the fittings, equipment etc currently in the shop - recently refurbished). He is also asking that we change the shop's name.

So you would still be liable for rent / lease on the premises, you MUST take legal advice on the terms. Can he even pass the lease on, on the same terms, will the landlord agree? (Actually this may be to your advantage, if you can negotiate a new lease, make sure you have a series of break points so that you can walk away if it doesn't work out.)

BunnieJ wrote: »

I (probably naivey) assumed I could continue to buy food from the wholesaler they currently use, but maybe have to set up a new account?

Yup, naive I'm afraid. And expect to have to pay up front for supplies rather than being able to open credit accounts.

BunnieJ wrote: »

I wouldn't have to pay any staff (except myself) as I would be the sole owner/runner of the shop.

More on this below.

BunnieJ wrote: »

As for the rest of the rates we have not yet discussed them.

Do not just discuss this, ask for everything in writing. You may or not be able to take over contracts for eg waste disposal, and he may or may not able to terminate them (but that's more his problem), but again you may find difficulty in getting credit agreements set up for this kind of thing.

AbbieCadabra wrote: »

won't TUPE apply for the current employee? don't think it's as easy as just getting rid of them & you running it, all depends how long they've been employed for i think.

I agree.

BunnieJ wrote: »

The company I currently work for was taken over and I TUPE'd across. I was told I basically had no choice but to go to the new company or I would lose my job, so I'm guessing that depends on if he let's his staff go before the sale?

Why would he let his staff go and pay redundancy, when he can transfer the liability for that to you, the new business?

BunnieJ wrote: »

I haven't seen the accounts yet, but I don't think the business can sustain 2 members of staff, so even if they TUPE across I'll have to let them go due to lack of funds :-(

Take advice: if you have to make a redundancy payment early on it could be the end before you've begun.

BunnieJ wrote: »

Hopefully if the business was doing well enough that I could afford to hire staff then I would, but that's opening a whole new can of worms!

I don't think I know any cafes which manage with just one member of staff: for the reasons Mistral gives.

BunnieJ wrote: »

This is all speculative as he may already have secured a buyer.

Frankly, I'd be wondering why he is really selling it for as little as £3000. Think about it: if it was doing well, it would be worth letting someone run it for him, and rake in the profit.

Please don't do anything without taking proper, paid for advice.

teabelly

If the business won't support two people then it isn't worth buying! Unless you can see a clear way of expanding it so it does support two people and money left over it sounds like a short route into earning nothing and working your backside off for the privilege.

Golden_Oldie

All that glitters is not gold! This sounds like too good an opportunity to be true. I'd personally be very cautious and gather all the relevant info before parting with any money as others have said.

BunnieJ

Thanks everyone.

Looks like the other buyer got it anyway. He stopped replying to my emails. Seemed a bit to good to be true and probably was. He was very cagey about giving me any details, and I couldn't find the shop!

DavidMackie

I'd be sceptical, too good to be true often is. get a valuation on the equipment you actually DO need and set up your own store, no need to buy this guy's bad news

Rottensocks

Thing is, if you can get a loan for £3000, you can start a sandwich business anyway - without the expense of the shop! You could start initially by selling sandwiches to local business park or something. If you need premises for food prep, you could approach local take aways - they may be closed in the mornings, and therefore have a nice empty kitchen waiting for you for a minimal fee.