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Buying an online art gallery

Interview with...

Andy Daniel
Age:
51
CV:
Accountant, manufacturing director, freelance consultant
Business name:
Wallspace Gallery
Goods/services:
Sells art online
Location:
Nantwich, Cheshire
When bought:
Two years ago
Price paid:
£9k
Art gallery3

After years of experience of helping people buy businesses and sell businesses, 51-year-old accountant Andy Daniel decided it was time to buy his own.

He wanted something to set up for his retirement, so he could take things a little easier without giving up work altogether.

I also want to move into a more home-based environment and I thought that an art shop or gallery would allow me to do this

Andy Daniel, online art gallery buyer

It just so happened that Andy had a passion for photography and art, and running an art gallery is among the more laid-back fields of entrepreneurship.

"The art business is something for later in life," says Andy, who still works as an accountant during the day. "My work at the moment is very hectic and in the future I want to slow down a bit.

Home environment

"I also want to work from home and I thought that an art shop or gallery would allow me to do this."

Andy spends a lot of time on BusinessesForSale.com looking for businesses for his clients, and he used it again when looking for his own. He wanted somewhere near his hometown of Nantwich in Cheshire, and eventually found a framing gallery in Chester.

He entered six months of negotiation over the sale but the gallery's turnover dropped significantly during that time, and that, combined with one or two other things that weren't quite right, led him to pull out, despite going to contract.

During negotiations, Andy had seen an online gallery which he thought would complement a traditional gallery well. But after the deal in Chester fell through, he decided that the website, called the Wallspace Gallery, would suit his needs on its own.

"When I saw the website on BusinessesForSale.com, I thought that would be a much better option for me," he recalls. "It would be a slower start; I could take my time over it. It was cheaper than buying an actual art gallery and would also be less work."

It was also easier to relocate, even though the previous owner was based in Berkshire. "We ended up driving a van full of stock from Slough to my house in Nantwich. There were 128 paintings in all - and most of them were framed."

Andy did a lot of research before going ahead with the purchase. "The owner sent us a list of his stock and we spent a lot of time looking at other art sites, comparing prices and making sure we could sell the stock for the prices that were recommended," he says.

"We did most of our research on the internet, finding out how well known the artists were, and what the sale prices were for similar products on other sites."

It took four months of careful assessment and negotiation before the deal was finally completed. The research was worthwhile, as Andy re-evaluated the company and bartered the price down from £20k to £9k.

 

Reluctant seller

The previous owner had been asking for too much for a business that hadn't actually started trading. "The negotiation was about standing our ground and making sure we didn't pay more than we should.

"He was very reluctant to sell at the price we were offering and on more than one occasion he told us there were other people interested. We just told him to sell to them if he thought he would get more money."

Despite his considerable experience of the financial side of business, Andy wasn't too proud to admit that there were other things to learn. "We had to do a lot of work on how to trade on the web, because we'd never done anything like this before," he says.

"We spent time looking into domain names and worked a lot with Nominet [the internet registry for UK domain names]. We also sought advice from web designers."

Andy, who has 30 years' experience as an accountant, knew how the buying process worked. "I've bought, sold and closed businesses down in my work life so it was imperative that we did things properly.

"I emphasised the need to have a formal changeover. We drew up official contracts of sale, consulting with lawyers during the whole process. This is something I was very familiar with."

The Wallspace Gallery - or wallspace-gallery.co.uk - is confounding expectations. "To be honest we didn't expect it to do very well in its first couple of years, but we've sold more than we thought. We've also had several artists come to us and ask us to put their work online."

So, what next for the gallery? "We are working on raising the profile of the site. We need to get more hits and we're looking to develop web sales and general awareness. Increasing search engine rankings is a top priority."

Whatever the fortunes of the gallery, Andy isn't going to give up the day job any time soon. "I like to think that eventually I will, but maybe not for seven or eight years.

"At the moment my immediate thoughts are to get the turnover increased to a certain level, and then it will be something to concentrate on during my retirement."

Andy has a few words of advice for prospective business buyers. And given his vast experience of the buying and selling process - and the fact that he managed to barter someone down to half of their original price - this is advice worth listening to.

"I think that when you buy a small business you have to get a deal together that is right for you. You cannot compromise.

"I think many sole traders tend to have a higher opinion of what their business is worth, and often price it according to that. Taking as many precautions as we could and doing so much research was our way of making sure that what we bought was worthwhile.

"Just be careful! Take care that what you buy is really what you think it is, and don't feel pressured."

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