Best advice for business loan?

The_Real_Cheddar_Bob

I used to run a retail business and it ended in bankruptcy. Mainly due to a number of points listed above.

Running a business in the retail sector ca be exceptionally lucrative. Cash is king and a cash rich business is certainly an attractive one.

Net profit is important however, you can be the most unprofitable business on paper, but cash rich and in reality very successful. It depends on how clever the current business accountants have been,

Usually businesses are valued with turnover taken into consideration. Turnover means sales and opportunity to improve, grow and increase business. If there isn't footfall and sales are not happening then it doesn't matter if you make a million net a year, if its reliant on one customer, its not wise to keep all eggs in one basket.

Food for thought before you get any further down the road, assuming the finance was possible:

Are there similar businesses?
Are there larger corporations planning to come to the same high street?
Is the business on the high street? Footfall counts for everything in retail
Are there footfall data?
Have you sat outside the shop for a few days and observed passing trade
What is the current stock value and is that stick being used at the moment?
Will the sale include stock or will they take that out? (usually there would be an agreement for the business to trade as normal and you would pay for any stock being carried over on top of sale price)
Are fixtures and fittings included
Any finance agreements on any equipment
Is there CCTV and is it a managed contracted system?
Is the business bound by insurance terms or contracted in any way
What are the leasehold fees? Do they increase yearly?
Is the lease a full repairing and insuring lease and are the current owners sub letting the lease to you? (eg they took out a new 15 year lease, they are in year 4 so 11 years left. For the next 11 years you sub let from them but they still have ultimate responsibility over the lease? if youre unsure check this out)
Does the sale include any customer data base, website rights, name of company, phone number, email address? if they took this it could close the business perhaps?
Have they any contract arrangements with suppliers, unfavorable perhaps?

and as above, does the business actually make money and if so why would they sell it and not just employ a manager to run it?

Retail businesses that are successful don't usually come up for sale. They usually get purchased by larger companies in the same market, or competitors trying to grow. Just like pubs, retail businesses aren't usually sold if they make money as filling a retail shop with staff is quick easy and cheap.

karl_jackson

thanks for the replies, will look into anything suggested that i have not already posed the question.

jonesMUFCforever

karl_jackson wrote: »

thanks for the replies, will look into anything suggested that i have not already posed the question.

So tell us what the capital account states at year end 2016, 2015, and 2014.