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  • #967449
    Deon
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    • Total posts: 7
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    Hi everyone :)

    I’m interested in buying a small business advertised in my local community.

    It’s a small chicken shop and I would love to run it. My fiance and I used to work there (and actually met there), so it has a bit of sentimental value to us.

    It’s being advertised for $50,000, and upon speaking to the Broker, he’s confident she’ll take $45,000.

    A small background:
    The shop was originally owned by ‘D’, who took pride in his work. He bought the business for $75,000 and sold it for $270,000 five years later.
    The next (current) owner, ‘P’ has run the business into the ground, and is desperate to sell (for the low 40,000s).

    That’s where I come in.
    Myself, my fiance and my mother would love to buy the place and fix it up.
    ‘P’ had no care for the customers, no interest in fostering the growth of the shop and really.. no clue.
    And we hope that we can fix that up.

    The problem – we’re too 18 year old students and my mother isn’t employed… so obviously no bank will touch us. Is there somewhere we can access grants/loans/etc for something like this?

    With Thanks,
    Deon :)

    #1026226
    rowan
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    • Total posts: 24
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    I applaud your willingness to get up and do something for yourself – but there is a reason the banks would not be interested in your loan application.

    There are a number of reasons why you should not look to buying this business. It seems like a great idea, and maybe you really do have what it takes to get the business going, but great ideas and willingness to work is not enough. Unfortunately it takes more than just the money to purchase the business, it takes a lot more money to get a business going than you might think. If the business has no customer loyalty it will take months to get people coming regularly through the door – can you survive as well as run the business if it runs at a loss for the first 6 months. How will you pay the bills?
    You money will be running through your fingers at first. Even just running the coolers and other electrical equipment is hugely expensive.

    That is just a tiny tast of the money issue.

    Can you all work together under pressure? what happens when one of you wants out? What happens when you have differing ideas of how to do things?

    If the business is a bit run down, you will also need the money to replace ovens and such. what about other maintenance issues? Licences, regulations, it never stops.

    I really don’t think you are prepared for the reality of owning a business. At your age you probably don’t have the life experience to understand all the issues involved. I have no doubt that you are passionate, but you really should at least do a lot of research and make up a good business plan, then talk to someone who is experienced in the industry.

    These sort of businesses are always coming onto the market, so don’t get impatient. Take a couple more years and get some money under your belt. I know it is frustrating, but a bit of time will help you get your ideas set.

    My written communication skills are not great but someone will soon jump in and give you some more understandable advice. Please don’t jump in too soon.

    #1026227
    Karen Wardle
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    • Total posts: 363
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    Hello Deon

    Welcome to flying solo, it is nice to meet someone so young with so much enthusiasm I also applaud your willingness to enter business and to succeed on your own merit.

    I am passionate about helping new small business owners to get started and that is a major component of my business. I have a lot of information on my website that can help new start ups with many aspects of business.

    But I have to agree with Rowan. PLEASE don’t buy this business! It is unlikely that you will get the funding anyway but I urge you strongly to take Rowan’s advice and just wait. As he has said, businesses like this come onto the market very often. There is always a take-away shop that the owner has lost interest in and a smart, savy businessman – or woman in your case – can come in and benefit from that.

    At 18 you really are not prepared for the realities of business. Many people entering business have an idealised version of what running their own business will be like. The reality is usually vastly different.

    As suggested you could do some study or courses and hang around here on Flying Solo. I guarantee you that you will learn SO much. I have, and I have been in small business for twenty years.

    So I would suggest getting some business knowledge under your belt and then thinking about what type of business would suit you. What are your interests, skills etc. Doing a self assessment will help you to choose the best start up business

    Deon, clearly you have a vision. The feedback and suggestions that you receive in this forum may not be what you would like to hear. But we tell you this because many of us have been in your shoes and we want you to learn from our mistakes. And I made PLENTY! (you can read about them here if you’re interested my story

    Deon I don’t want to be a dream killer, if you want to discuss this further you can send me a private message. But please think about this very carefully. Even if you won the lotto tomorrow, I would still say………don’t do it!

    One more thing that I would like to touch on is your relationship. You and your fiance are happy or you wouldn’t have gotten engaged. Going into business together is a strain on any relationship. Even when the business is a healthy one. The pressure to turn around a failing business is enormous. On top of that you would also have the financial burden.

    As Rowan mentioned, he has only touched the surface with all of the things that could go wrong.

    I am all for encouraging young people but I think that this would be a tremendous hurdle for you to overcome.

    Please let us know what you decide :)

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