| Buying a Business Case Study
| Age: | 37 | | When: | January 2006. | | Total spent: | £135k. | | CV: | No previous experience in catering but lots of business management. | | Key advice: | “Don’t take the reasons for selling on face value – do some investigative work before making a decision.” |
Richard Woods and his partner Jillian took over a bakery and coffee shop in March 2006. Partly, he says, to do with an impending mid-life crisis: “I spoke to so many people, who were all getting to that age [40], who were fed up with their lives and they wanted something a bit different. When you get to 40 you kind of start thinking it’s your last chance.” Buying a business was the preferred option for the couple, who’d decided to work for themselves almost a year before finally getting their hands on their dream opportunity. “When you start up a business you have to be more a lot more involved. To make it a bit easier on ourselves we wanted an established business with a good track record,” says Richard. Teething problems The whole process took quite a while after the first business they tried to buy, a convenience store, fell through. “The first time around we had problems. We went through an agency and a lot of the information they provided us with was really quite vague and not very accurate. It’s not at all like buying a house,” he explains. “It became apparent during the sale that the turnover was different to what we had initially been told – they’d overstated it by £80k. “Also, the lease wasn’t as they had advertised it – there was only three years left instead of the ten they had initially told us. They then said we could extend it, but at an additional cost of £1500, which I thought was rather cheeky. “In the end we decided it wasn’t a viable option, so that fell through and we found this one.” Decisions, decisions The couple had been looking at various businesses to buy, and despite neither of them having a background in catering (Jillian used to be a database manager before having two children); they opted for a bakery and coffee shop – because it looked as though it would be profitable. They also had a set idea of what they wanted out of their new lifestyle choice. Richard explains: “As a motor trade manager I have had a lot of experience in running garages and businesses with anything from £15m to £30m turnover. I wasn’t worried about the day to day running of a business – in any case my partner was going to be handling that. “We wanted a business that was close to home that fitted in with our lifestyle. “We were also looking for something that wasn’t going to be a drain from a time point of view. Although we have an early start, finishing at three means we still get to spend quality time with our children.” Staff issues Often when taking over a business, problems arise when keeping the existing staff. This wasn’t the case for Richard and Jillian. “I was looking for a business which had long term existing staff – the age profile of the employees was really important,” he says. “We wanted a business where the bulk of the staff are aged 30 to 40, where you don’t get those phone calls to say they aren’t coming in because they had too much too drink the night before. We wanted established, settled and responsible people. “That has been the one thing, a lot of people look at all sorts of things when buying a business, but perhaps they don’t always pay enough attention to the resources available and in particular the staff. We had already made our minds up about what we wanted and this was definitely a great benefit to us. Richard adds: “As a consequence the changeover has been absolutely fabulous – we’ve kept everybody on and we haven’t had a single problem.” Support The couple did a lot of research, aided by Welsh organisation Business In Focus. “One of the more challenging aspects of buying a business was our naivety. Because it was our first time, getting used to the buying process was especially hard. Just when we thought we had done everything, something else would come up. We would be a lot more aware next time. “Another thing that we found quite odd was that the support available to us wasn’t very publicised. “We worked a lot with Business In Focus – they did our business plan for us, met with us several times and generally worked as a great sounding board. “They are still working with us now, providing help in all areas of running the business like HR and payroll.” The couple’s business comprises two units and employs 12 staff. In one there is a takeaway bakery selling pies, pasties, sandwiches etc. “All our products are fresh and made on site – so there’s always the lovely aroma of fresh bread,” enthuses Richard. The other unit is a coffee shop which also does meals and has 36 covers. While there is competition in the local area, Richard says they are doing well. Their main competitors do a similar kind of thing but don’t have the actual bakery facility. There’s also a chain bakery nearby, though rumour has it that they are up for sale. “Business In Focus did a lot for us in this area,” explains Richard. “They produced a five page document with information on the region and the marketplace. It was like a swot analysis and it was really informative. It helped us enormously.” Settling in Richard and Jillian got to grips with the business long before taking over, thanks to the help and support of the previous owners. “We got to know them really well. They allowed us to come in for a day, once a week for six weeks. Not only did this give us a great opportunity to become familiar with the business, we also got to know the staff and they had the opportunity to get used to working with us. “They also allowed us to interview the staff before we took over. That enabled us to put any fears they had to rest, and ensure that they were going to be happy with the way we were going to run the business. “It also allowed us to tell them our plans – initially we’re going still going to be getting used to the business before putting our own stamp on things in a few months’ time.” The future looks bright Whenever you take over or start a business you need to think about the future and give consideration to its potential. “We are thinking of expanding although we have a lot on at the moment. We are juggling a lot as we are also in the middle of a property redevelopment. “Having said that, we have been in negotiations with the RAF base which is near here. We’ve talked with the MoD about putting our business on site. We’ve done a bit of research on it – and we know that there is a Government proposal for a training centre.” If that goes ahead there could be anything up to 6,500 extra bodies on site, all of whom would need feeding! | 
