Buy a business

Adly812 · 1 November 2018 at 11:00PM

I have no idea how to run my own business. I’m no good at tax, the legislations. I actually have no interest to want to know about it. However I want to make money... and never taking risks is not going to achieve that. I have a big deposit to put towards investing or something.. my ultimate goal, is to make money and not do anything. So it occurred to me, why don’t I buy a business and get someone in it to run it?
A local hair dressers is up for sale.

WE ARE INFORMED the turnover averages £1,800 p.w. in our opinion offering tremendous potential for further increase in the right hands. We are further advised that the sales year ending 30th April, 2017 showed £100,529 with a gross profit of £97,065 (before wages of £56,259).We understand the premises are held on a secure renewable Council lease the present lease expiring in October, 2019 at a rental of £8,500 p.a. exclusive of rates, fixed for the remainder of the term.

Uniform Business Rates: Nil payable after small business relief
It’s advertised for £30000k

I’m tempted to buy it. Hire the right person to run it ?
Is this wise. Or what else would you do to make money

Browntoa · 2 November 2018 at 8:44AM

High street near me , 2 hairdressers a couple of years ago but there is now about 8 all fighting for business.

Hairdressers are only as good as their staff , if your best stylists leave their customers will too

joecranejoe · 2 November 2018 at 10:10AM

I ran a salon/barbers/sunbed shop with my partner for 3 years and gave it up recently as the lease came up.

If you want to sit back and make money this isn't your business - as suggested by Browntoa, staffing will be your major issue, girls leaving on maternity leave, finding skilled staff etc is an absolute nightmare.

Ideally you'll want a business with easy staffing i.e. not skilled or trained professionals.

Convenience shops can make great money, a friend of mine runs a little shop & off licence and does up to 2-3k per day!

spadoosh · 2 November 2018 at 10:29AM

Smb3088 wrote: »

I have no idea how to run my own business. I’m no good at tax, the legislations. I actually have no interest to want to know about it. However I want to make money put simply you dont make money without bneing interested in what your money is doing.... and never taking risks is not going to achieve that its usually fairly proportionate. Low risk makes low money, high risk tends to make high money. I have a big deposit to put towards investing or something.. my ultimate goal, is to make money and not do anything sounds like a sure fire way of losing any money youve made. So it occurred to me, why don’t I buy a business and get someone in it to run it? because you dont even know the basics
A local hair dressers is up for sale.

WE ARE INFORMED the turnover averages £1,800 p.w. in our opinion is this your professional hair styling opinion or your professional business person opinion? offering tremendous potential for further increase in the right hands. We are further advised that the sales year ending 30th April, 2017 showed £100,529 with a gross profit of £97,065 (before wages of £56,259)Theres huge problems youve missed here already.... £1800 per week is £93,600 yet sales where £100,529, not adding up. .We understand the premises are held on a secure renewable Council lease the present lease expiring in October, 2019 at a rental of £8,500 p.a. exclusive of rates, fixed for the remainder of the term.

Uniform Business Rates: Nil payable after small business relief
It’s advertised for £30000k

I’m tempted to buy it. Hire the right person to run it ?
Is this wise. Or what else would you do to make money

Youve practically wrote 'im in a wheelchair, how do i go about getting a professional footballers contract with manchester city?'

Theres a thousand issues with what youre suggesting, not least ensuring you do employ someone who does know what theyre doing, when you dont have clue what to look for.

Either put a lot more research in to doing this (something like 10 hours a week for the next year or so) or just accept that you will probably screw it up and lose money.

The vast majority of business is common sense. And the fact that youre saying you dont have a clue about it suggests its not a good idea.

Easiest way to make money is find something youre good at (making or providing) that people want.

Ilona · 2 November 2018 at 11:00AM

I was walking down our High Street only yesterday and noted that two brand new hairdressing shops had sprung up, premises previously used for other retail. I thought blimey, how many is that we have now. Everyone is at it.

A family member has recently refurbed a shop and turned it into a hairdressers with a tanning booth. Borrowed the money, him and his wife are running it themselves. He said they have just had two very lean weeks when hardly anyone came into the shop.

We have an established hairdressers near where I live which has been up for sale for about five years, nobody wants it. A new hairdressers sprung up and they have had to start doing nails as well, not enough customers to keep the hairdressing going.

You need to see evidence of previous trading, facts and figures written down. You need to go to the salon, park outside at different times of the day and watch how many customers step over the threshold. Do this for a month.

You need to ask friends and family which hairdressers they use, and why they use them. Although you say you won't be running it, you need to know where the potential customers are, and liaise with your manager on how best to attract more custom. A good manager is going to want a good wage.

When you have some figures together, do projections on future business, how much do you have to take to cover all overheads. Then work out whether you really want to go down that route.

Look at yourself, how risk averse are you. What would happen if it was a big failure, could you pull yourself up out of the doldrums and start again.

ilona

Adly812 · 2 November 2018 at 12:25PM

Thank you .. yes I could not agree more on the hair salon now when you point out obvious facts. There are some convenience shops also in my price range for sale.
I won’t dive in or do anything in a rush. But I have the money and I just want to invest it into something that makes money. Maybe renting is better in my case,
When I say I don’t have a clue,.. I’m dumbing myself down. I’m probably the most capable person. I intelligent and quick to learn. I’m just lazy. So I don’t want to do it. Just want to say, hear is the money. Now you make us money?

Pennywise · 2 November 2018 at 1:28PM

You would be VERY lucky to find staff to run your business for you if you want minimal involvement. Unless you're there and participating, you won't know what's going on. I'm not just talking about potential theft or doing back-packet work, I'm talking about general attitude, laziness, poor customer service etc. You'd effectively need the hairdresser to be a manager as well, so that makes them even rarer and more expensive.

As others have eluded, what happens when your staff go on maternity, or are off sick, or leave at short notice? How are you doing to cover their work if you're not a hairdresser yourself?

Smb3088 wrote: »

Just want to say, hear is the money. Now you make us money?

No employee is going to do that for you unless you choose the right person and incentivise them, i.e. bonuses or profit shares, which will dilute your return.

Pennywise · 2 November 2018 at 1:31PM

joecranejoe wrote: »

Convenience shops can make great money, a friend of mine runs a little shop & off licence and does up to 2-3k per day!

That's turnover, not profit and it'll also be VAT inclusive and margins are low. One of my clients has a similar "open all hours" shop that has similar turnover, but the actual net profit after wages, overheads, costs of sales, etc is only about £26k per year, which is basically his wage! He's happy enough as he'd probably earn less than that out in a proper job (few qualifications, no experience etc), but it's hardly a gold mine and of little interest to an investor. (As an investor would have to pay for another full time job to cover the shifts the owner currently works) so "profit" would probably be half, say £13k p.a. - not much of a return!

spadoosh · 2 November 2018 at 1:49PM

Smb3088 wrote: »

Thank you .. yes I could not agree more on the hair salon now when you point out obvious facts. There are some convenience shops also in my price range for sale.
I won’t dive in or do anything in a rush. But I have the money and I just want to invest it into something that makes money. Maybe renting is better in my case,
When I say I don’t have a clue,.. I’m dumbing myself down. I’m probably the most capable person. I intelligent and quick to learn. I’m just lazy. So I don’t want to do it. Just want to say, hear is the money. Now you make us money?

No, renting isnt for you either. Theres responsibilities you need ot be aware of and it requires involvement. Failure to adhere to those responsibilities can be more costly than any gains. The sums of money youre talking would mean the profitability on managed rentals would be very limited.

I dont like questioning peoples intelligence but the fact that you are asking how to make money with as little involvement as possible suggest you do lack the intelligence in that field.

I imagine the best place for you to put your money is in a managed investment portfolio.

Forgive me but individual business management isnt for you. They always require time and effort. Unless youre pumping in serious capital (as in millions) your return on investment will be somewhat limited. These small businesses and small scale landlords can make these things work because they do put the time and effort in. They simply become less and less viable the less youre willing to do.

Look at investment funds. You give someone a chunk of money. They take a bigger chunk of money collected from lots of people like oyu. They invest that large fund to try and get a good return. Theres variability in risk. The higher risk usually the higher reward. That said with higher risk comes a higher chance of no reward. So you returns will largely be dictated by how willing you are to lose all the money and how much someone will charge you for their experience and time.

Adly812 · 2 November 2018 at 3:06PM

Thank you .. sooo right. I’ll give business ideas less thought and just invest in something like funds or bonds etc . I guess I watched my parents business boom but how hard they worked was hurtful to see. So I’m looking for ways of being your own boss, making money but not really being involved. Like a silent investor,.. but there is so much more to consider as you have suggested above

spadoosh · 2 November 2018 at 3:29PM

Smb3088 wrote: »

Thank you .. sooo right. I’ll give business ideas less thought and just invest in something like funds or bonds etc . I guess I watched my parents business boom but how hard they worked was hurtful to see. So I’m looking for ways of being your own boss, making money but not really being involved. Like a silent investor,.. but there is so much more to consider as you have suggested above

Sorry to be the bearer of bad news but unless youre inheritting a huge windfall youre going to need to work to earn enough money to live off.

I think most people would prefer to earn money and not work, the reality is the majority of these people are either particularly wealthy, typically from birth, or claiming benefits. Those who arent wealthy from birth usually require a combination of hard work, dedication, luck and ability.

I too have seen my parents work hard to set up a thrving business. I too think that looks like too much effort and responsibility, hence why ive accepted that the simplest option is to just work 9-5, live frugally, limit my expectations, learn to be content with little whilst saving to limit my working life and ensuring i can live with the same expectations upon retirement. The likes of you and me arent cut out to earn big money, the truth is we cant be bothered (and with all due respect to you i do know how to make money, its just it requires effort and risk). If you do want to earn big money, be bothered and youre more likely (though certainly not guaranteed) to make it happen.

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