What to do with a small business

[FutEng]

I am in partnership with somebody in a small business. Its Energy Certification services for the property sector. We ran this full time during 07/08/09 but we both returned to PAYE in the multinational sector in 2010 as we wouldn't get a decent income from the business anymore.

We have been running the company part time since and we are reaching burnout point!

The company has income of about 3K per month on a regular basis without any advertising or effort to bring in more work. We have outgoings of about 3K also. These would be my van, our phones, diesel etc. So the current account never really accumulates much money. We have a business loan of about 30K which makes up 1K a month for the next 3 years (that's included in the 3K outgoings).

Right this minute I would love to sell this business and my partner also but we are not quite sure what we are selling... We work from home, we have regular clients but its essentially a service business. We thought about getting someone to run it but the cost of getting someone good to do your business and pay them a decent rate could push us over the edge financially.

I am investing about 10 hours a week on top of a busy day job at the minute and this cant go on as I have a baby on the way this summer and I am about to take over the family farm next year also!

Who should advise me on this? M accountant I assume but if any of you have any insights then feel free to respond.

 

[8till8]

Many accountants only have experience in "how" to do something and very little commercial experience in "what" to do next, you may not get much value from them.

The real value in your business is the 3k of income, which sounds like its coming in quite easily (except you are time limited)

So you are looking for someone who;
a) would see potential to grow 3k into something bigger for themselves
b) take the 3k income, reduce the costs, keep the profit
c) bolt-on the business onto their existing business and get 3k extra income quite cheaply.

So you should consider;
-maybe a competitor would buy the business/clients
-talk to local chamber of commerce, other business may be interested
-take an ad out in the local paper, selling the business, requesting interested parties to contact you.
-your bank manager, he/she may have plenty of cash rich customers who want to invest.

 

[Woodie]

reading between the lines you seem to be sick to the teeth with this business and you have effectively answered many of the questions yourself.
1. You could not make a living from this business so you moved on
2. You are increasingly under pressure in your lifestyle and obligations so something has to give.
3. It's a service business so if you selling you are mostly selling knowledge.

So you have to look at the facts. You don't say fully what the other outgoing of the business are going on, like are you making or taking any money yourself? You don't say if you have long term obligations to clients who you might feel you are letting down? However without looking at the accounts if your are not taking any money yourself....you are not making money. Ask yourself again, if you spent all your time doing this job full time could you make a living? You said you could not, why are you so sure that it is viable longterm for someone else to buy?
Try to examine the business again. See if it is possible you can package to sell on as a business to someone already doing something in the sector. Maybe merging two apparently diverse professions can may one profitible or more profitable business. The value of the business is it's ability to generate cash and make profit. Your money generation rate of approx Eur75 per hour of work seems like a reasonable return. Remember however sometimes such knowledge based businesses can't be sold without the person with the knowledge (Catch 22). However you intimate that you need a van so there has to be something more than knowledge involved and that should be sellable.
Sorry can be more helpful without details. For sure you are ready move on so that's a good first decision you have made. Worst case scenario you close it sell off what you can and pay off the loan. You loose something but you gain another experience (orderly windup) and best of all you get back to living your life and enjoying your new family.

 

[shopgirl]

Would it be feasible to employ someone on a part-time basis? There must be lots of people out there who would have the time & energy to build up the business for you & perhaps create a full time job for themselves.

 

[J.Ryan]

I am in partnership with somebody in a small business. Its Energy Certification services for the property sector. We ran this full time during 07/08/09 but we both returned to PAYE in the multinational sector in 2010 as we wouldn't get a decent income from the business anymore.

We have been running the company part time since and we are reaching burnout point!.

I can understand how tiring this would be

The company has income of about 3K per month on a regular basis without any advertising or effort to bring in more work. We have outgoings of about 3K also. These would be my van, our phones, diesel etc. So the current account never really accumulates much money. We have a business loan of about 30K which makes up 1K a month for the next 3 years (that's included in the 3K outgoings).

You are confusing outgoings with profit, if you ceased trading what would happen to the van, how much would the phone bills drop and what happens to the loan, would you still have to pay that?

Right this minute I would love to sell this business and my partner also but we are not quite sure what we are selling... We work from home, we have regular clients but its essentially a service business. We thought about getting someone to run it but the cost of getting someone good to do your business and pay them a decent rate could push us over the edge financially.

I am investing about 10 hours a week on top of a busy day job at the minute and this cant go on as I have a baby on the way this summer and I am about to take over the family farm next year also!

The 10 hours a week that you work, could you cut that, perhaps get someone else to do the admin.

Who should advise me on this? M accountant I assume but if any of you have any insights then feel free to respond.

Talk to your family, your accountant and you business partner and then decide whats right for you.