Business Crossroads
Discussion
Following on from my "Buy to Let" thread, I thought it might be interesting to elaborate on the circumstances leading me to this possible venture.
My current business situation.
I own/run a manufacturing business which is suffering the same problems as many others in the UK. Over the last 10 years we have been bombarded by countless, pointless legislation & constraints. Add to this the high value of the £ and our shocking labour market, rates & quality, and it's not surprising to see that we are on our knees and uncompetitive. In our particular industry, it is impossible to impose price increases, to the contry, yearly price reductions are expected. Our profit margins have been gradually eroded away year by year despite massive improvements in efficiency, and I feel we are nearing the end. It has now got to the point where only a handful of UK manufacturers are left, most have either shut shop, relocated to Eastern Europe, South Africa, Far East or are buying in cheap imports and distributing. We are too small (8 people) to dream of relocating and I do not want to become a distributor. To stubbornly carry on as a manufacturer in this Country would require a serious injection of cash to invest in new machinery/building alterations thereby removing certain labour intensive jobs. This investment would be in the region of £350k and would leave the Company without it's current cash reserves. It would also mean borrowing £ which we have never done as a Company and i'm very mindful of the risks. Having done the math, it would appear that even having invested heavily, the returns would be meager and we would still be expensive compared to our overseas competitors.
As a result of my current situation I now feel that it might be time to change tack and get into something more profitable & with a brighter future. The problem is, i've now reached the crossroads but am unsure in which direction to turn!!
With regard to investment capital. I own the business premises outright which is located in a very upmarket rural village and is valued at £450k commercial. However, if I were to sell the property, it would be to a private buyer or developer. It is a beautiful old school building with bags of character that, with a little work, would make a lovely house. Alternatively, the land & location would be a goldmine for a builder/developer. I am not sure of the planning permission laws these days but would have thought it would be ok. I'm sure that in the current market, the property/land would sell for upwards of £750k. Added to this, the Company has cash reserves of £250k in reserved profit which could be used. My fiancee and I are also looking at moving home this year, i have £50k mortgage on my £130k home.
Even though financially, I am in a strong position, I am finding it very hard deciding the direction to go. The thought of pooling all wealth and making a fresh start overseas has also crossed my mind.
Any pearls of wisdom from you PH'ers??
My current business situation.
I own/run a manufacturing business which is suffering the same problems as many others in the UK. Over the last 10 years we have been bombarded by countless, pointless legislation & constraints. Add to this the high value of the £ and our shocking labour market, rates & quality, and it's not surprising to see that we are on our knees and uncompetitive. In our particular industry, it is impossible to impose price increases, to the contry, yearly price reductions are expected. Our profit margins have been gradually eroded away year by year despite massive improvements in efficiency, and I feel we are nearing the end. It has now got to the point where only a handful of UK manufacturers are left, most have either shut shop, relocated to Eastern Europe, South Africa, Far East or are buying in cheap imports and distributing. We are too small (8 people) to dream of relocating and I do not want to become a distributor. To stubbornly carry on as a manufacturer in this Country would require a serious injection of cash to invest in new machinery/building alterations thereby removing certain labour intensive jobs. This investment would be in the region of £350k and would leave the Company without it's current cash reserves. It would also mean borrowing £ which we have never done as a Company and i'm very mindful of the risks. Having done the math, it would appear that even having invested heavily, the returns would be meager and we would still be expensive compared to our overseas competitors.
As a result of my current situation I now feel that it might be time to change tack and get into something more profitable & with a brighter future. The problem is, i've now reached the crossroads but am unsure in which direction to turn!!
With regard to investment capital. I own the business premises outright which is located in a very upmarket rural village and is valued at £450k commercial. However, if I were to sell the property, it would be to a private buyer or developer. It is a beautiful old school building with bags of character that, with a little work, would make a lovely house. Alternatively, the land & location would be a goldmine for a builder/developer. I am not sure of the planning permission laws these days but would have thought it would be ok. I'm sure that in the current market, the property/land would sell for upwards of £750k. Added to this, the Company has cash reserves of £250k in reserved profit which could be used. My fiancee and I are also looking at moving home this year, i have £50k mortgage on my £130k home.
Even though financially, I am in a strong position, I am finding it very hard deciding the direction to go. The thought of pooling all wealth and making a fresh start overseas has also crossed my mind.
Any pearls of wisdom from you PH'ers??
I know exactly what you mean, as we have a very similar problem here.
We own and rent out warehouses and offices and clearly demand has reduced although we remain mostly let.
We now have funds to invest and are considering various options.
The key is to get a good return on investment with minimal risk of course but the question is what in?
Ideas always welcome..
We own and rent out warehouses and offices and clearly demand has reduced although we remain mostly let.
We now have funds to invest and are considering various options.
The key is to get a good return on investment with minimal risk of course but the question is what in?
Ideas always welcome..
This is now becoming more stressful than you can imagine. Every time I start to focus on a particular option, something, or someone comes along to cast shadows on the idea. It is obviously better to have thought of everything before diving in, but at the moment I’m not even going to get my feet wet!!
It is certainly easier making daily business decisions that are MUST DO'S. Having the luxury of significant capital to craft a new, hopefully brighter future really complicates matters. The unknown and fear of making the wrong choice are obviously playing on my mind but I know that once I’ve decided the way forward, I will get become focused and driven again. At the moment I’m in a flat spin.
The UK property market is still a consideration for me but I do wonder whether it is 5-10 years too late to get in. I have people telling me that I should apply for outline or full detailed planning permission to convert to residential usage on my business premises. This will greatly increase the value of the property/land. The plot is 800sq/M with the property occupying approx. 550sq/M. I could undertake a conversion of the building to make either 1 grand property of the old part or build several properties on the plot. A 3-bed semi in the village 1/8th mile away is selling for £400k in today’s market. In developing my business site (if planning is granted) to residential, it would sell in today’s market at £1.25M I would have thought. It certainly makes you think!! There is also the option of selling the plot to a builder/developer who will also see the potential.
Another thought is whether to sell up everything and emigrate. Only problem with this option is that my soon to be wife & I will have to get jobs, overcome language & cultural differences etc. My CV reads - 1 job in 15 years employment, director for last 5. My fiancée is a Jewellery retailer.
Where is that light that guides the way when you need it???? J
It is certainly easier making daily business decisions that are MUST DO'S. Having the luxury of significant capital to craft a new, hopefully brighter future really complicates matters. The unknown and fear of making the wrong choice are obviously playing on my mind but I know that once I’ve decided the way forward, I will get become focused and driven again. At the moment I’m in a flat spin.
The UK property market is still a consideration for me but I do wonder whether it is 5-10 years too late to get in. I have people telling me that I should apply for outline or full detailed planning permission to convert to residential usage on my business premises. This will greatly increase the value of the property/land. The plot is 800sq/M with the property occupying approx. 550sq/M. I could undertake a conversion of the building to make either 1 grand property of the old part or build several properties on the plot. A 3-bed semi in the village 1/8th mile away is selling for £400k in today’s market. In developing my business site (if planning is granted) to residential, it would sell in today’s market at £1.25M I would have thought. It certainly makes you think!! There is also the option of selling the plot to a builder/developer who will also see the potential.
Another thought is whether to sell up everything and emigrate. Only problem with this option is that my soon to be wife & I will have to get jobs, overcome language & cultural differences etc. My CV reads - 1 job in 15 years employment, director for last 5. My fiancée is a Jewellery retailer.
Where is that light that guides the way when you need it???? J
You need to get accurate facts and figures. Get some values from agents, as is now, instruct a surveyor for differnt options and apply for planning permission or outline permission. talk to developers etc.
You may need to spend a few £k to get the facts and options explored correctly but its better then selling up or going for option x and finding out its not a runner and then up then in a flat spin at 500 feet.
You may need to spend a few £k to get the facts and options explored correctly but its better then selling up or going for option x and finding out its not a runner and then up then in a flat spin at 500 feet.
Blimey!
Feeling sorry for yourself? WHY!? You can liquidate the best part of a million quid with a little effort.
That's a powerful lot of money. The options are practically endless! What a nice position to be in! Stop worrying and start congratulating yourself on achieving a buffer of cash that gives you the chance to start up a new business almost anywhere you please! Sure your manufacturing business is no longer viable - congratulations on spotting this way ahead of time! So many business people keep on plugging away until they go bust - you would be exiting with capital!
If you emigrate as a business person there are no-end of countries that would take you happily - with that sort of funding to transfer. New Zealand, Australia - even the US if you really wanted.
The question has got to be - what floats your boat as something to do? What skills do you have and are they transferrable to other countries/economies? Clearly you can manage a business competently - what do you want to make or what services do you think you could offer?
Feeling sorry for yourself? WHY!? You can liquidate the best part of a million quid with a little effort.
That's a powerful lot of money. The options are practically endless! What a nice position to be in! Stop worrying and start congratulating yourself on achieving a buffer of cash that gives you the chance to start up a new business almost anywhere you please! Sure your manufacturing business is no longer viable - congratulations on spotting this way ahead of time! So many business people keep on plugging away until they go bust - you would be exiting with capital!
If you emigrate as a business person there are no-end of countries that would take you happily - with that sort of funding to transfer. New Zealand, Australia - even the US if you really wanted.
The question has got to be - what floats your boat as something to do? What skills do you have and are they transferrable to other countries/economies? Clearly you can manage a business competently - what do you want to make or what services do you think you could offer?
Maybe the property route is less attractive than it might have been a year or so ago. However, it might be worth looking at getting involved in the "affordable housing" market. This is currently going through a bit of a boom as the government is actively assisting in the building of cheap housing for specific sectors (teachers, policemen, nurses, public servants etc). I don't know that much about how you go about getting involved in this area but I'm sure there must be a ".gov" website somewhere.
Given the government support for this ector, it might even be "property cash" proofed to some extent.
Given the government support for this ector, it might even be "property cash" proofed to some extent.
So I wasnt far off in terms of the size of the place
Seriously though, you have SOOOO many options open to you...
Re emigrating Have you considered the USA? L1 Visa etc...? It could be quite easy for you to obtain.
I know what you mean, its a headache, these kind of decisions are the most challenging, but they can also be hugely rewarding.
Like I said in the email, you need to contact the council with a view to residential planning permission, that itself will increase the value. You can have a good chat with one of their planning advisors. Residential sites usually the most lucrative. And I too have heard things regarding S106 affordable housing projects, mainly that planning permission maybe more readily granted?
Good luck, and be more excited rather than worried!
It helps sooo much in the decision making process!
All the best
Seriously though, you have SOOOO many options open to you...
Re emigrating Have you considered the USA? L1 Visa etc...? It could be quite easy for you to obtain.
I know what you mean, its a headache, these kind of decisions are the most challenging, but they can also be hugely rewarding.
Like I said in the email, you need to contact the council with a view to residential planning permission, that itself will increase the value. You can have a good chat with one of their planning advisors. Residential sites usually the most lucrative. And I too have heard things regarding S106 affordable housing projects, mainly that planning permission maybe more readily granted?
Good luck, and be more excited rather than worried!
It helps sooo much in the decision making process! All the best
If you can liberate a seven figure sum in folding, listen to Uncle Don.
Get the f@ck out, move up to Ecosse, buy a tidy mansion for £8 replete with a garage full of good value auto indulgence and look into part time cat burglary.
Sensible policies for an economy which is, to quote either Tango or Cash, "fubar."
Get the f@ck out, move up to Ecosse, buy a tidy mansion for £8 replete with a garage full of good value auto indulgence and look into part time cat burglary.
Sensible policies for an economy which is, to quote either Tango or Cash, "fubar."
Don't normally come in here, so forgive the intrusion.
But, I see that 'Choice Paralysis' is raising its ugly head once again.
You're profile doesn't indicate an age so difficult to comment but...
With that amount of capital I think I'd go setup in Eire and relax for a while before setting up some housing developments or small local business, apparently the Celtic Tiger is still purring.
Alternatively if you like the sun I know of a few friends playing out a similar role in Ibiza, Thailand etc.
I guess it depends where your heart lies. What is it you would like to do?
best
Ex
>> Edited by TheExcession on Wednesday 14th April 22:30
But, I see that 'Choice Paralysis' is raising its ugly head once again.
You're profile doesn't indicate an age so difficult to comment but...
With that amount of capital I think I'd go setup in Eire and relax for a while before setting up some housing developments or small local business, apparently the Celtic Tiger is still purring.
Alternatively if you like the sun I know of a few friends playing out a similar role in Ibiza, Thailand etc.
I guess it depends where your heart lies. What is it you would like to do?
best
Ex
>> Edited by TheExcession on Wednesday 14th April 22:30
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