B*stard Cancer - Crowdfunding

[ChocoChocoLatte]

Hello - long time no post. Please note this is not a woe is me post - I'm here because I need some help/advice/guidance from anyone who has taken part in crowdfunding.

Long and short of it is, I'm considering crowdfunding to hand my business over to my staff or local community.

I haven't spent this long and worked this hard to have to close it. We've kept everyone safe and employed throughout covid but my health no long allows me to drive the business forward.

It's a great hospitality business with a loyal customer base and excellent reputation. I desperately don't want to close it but cannot afford to just walk away without getting back our initial investment.

Would this be something we could crowdfund? Has anyone any experience of this?

I have a stage 4 cancer diagnosis since October 2018 and the first half of the year has been pretty tough. I worry that if things took a dramatic turn what would happen to the business. DH will be too busy dealing with the DC (he isn't involved in the business) and there are 10 staff to be considered.

Thanks for reading this far!

@chantico

You first need to establish if the staff want to buy, or would prefer you to seek a buyer.

It is up to them to establish how they will fundraise if they want to buy it themselves

What is the current legal status of the business?

CIC might be more appropriate than PLC in the longer run

Having spoken with them I believe they're keen, with some guidance. We were all to investigate some options and regroup this week.

The business has operated as a limited company for >10yrs now.

I'll have a look into CIC. I used to be involved in one a long time ago so would need to refresh.

@ChocoChocoLatte

Thanks *@FudgeSundae*. If the staff set up a limited company and raised funds that way would that be a consideration?

Should I be looking more into a 'gofundme' route?

My head is burst.

Management buy outs can work, but typically it’s from senior management that already run the company. It sounds like your staff are quite junior? You’ll need the senior guidance. What kind of buyer is ideal? I think your ideal buyer might be another local business owner looking to expand. So say a local restaurant owner or something. You could approach them directly once you’ve identified them, rather than inviting bids.

Sorry about your situation
I run a business too so sort of see where you’re coming from but the crowdfunding option won’t work

Only options are sell the business or probably better pay a new manager to run it on your behalf.

I’m beginning the process of selling mine and know exactly how worrying the prospect is

@SprayedWithDettol

I would employ a manager.

I don't want to as they are ultimately answerable to me. We tried this route and it didn't work out. I even took a part time job elsewhere so after a period of a month handover she was in charge. I didn't micro manage etc. It just didn't work. I'm aware there are others I could look at employing but I am exhausted.

This is likely to be the best health I'll be in without a drastic change. I have a complicated, agressive, grade 3, metastatic cancer with only two lines of treatment left after this one stops working.

I don't want to employ a manager and respect that's what you might do but it's not what I asked. I'm investigating ways to allow my staff to take it over to ensure their futures and give something back. If it's too complicated or not possible I'll just sell it.

I need peace and time to focus on my health. My children deserve a mother willing to do this.

Thanks for your comment though.

@Frazzled2207

Sorry about your situation I run a business too so sort of see where you’re coming from but the crowdfunding option won’t work

Only options are sell the business or probably better pay a new manager to run it on your behalf.

I’m beginning the process of selling mine and know exactly how worrying the prospect is

Thank you @frazzled2207

Good luck with your sale.

If you have a strong community involvement, does your local council offer any kind of grant schemes that might be helpful?

This is our local one, for info:

www.worthingcommunitychest.org/

Agree that unless you’re exceptionally lucky, finding a good manager, that you can fully trust to get on with the job, will probably be harder and more stress in the long run than finding a responsible buyer. In the latter case at least when it’s gone it’s gone.
Trying to find a way for the staff to buy it would be wonderful if possible

@Frazzled2207 wouldn't it just. Thank you

Agree with PPs that crowdfunding wouldn’t be feasible.

Also wouldn’t spend valuable time looking at team ‘buy out’ options: if any of the team are up for that and have the means, which is unusual, they need to do ALL of the work, and fast.

Given your and your family’s situation, would now look to sell the business asap, taking advice from any local services available. Would just seek to get the best possible price you can, quickly, in current difficult circumstances.

You’ll need to set aside your beliefs about the business worth and concern for employees and the community: employees will need to take decisions for themselves.

Otherwise, if you don’t resolve this asap, there’s much too high a risk of a change in your condition leaving your DH having to deal with the business matters and sale, on top of everything else. This would be worse for everyone involved.

@Dozer

Agree with PPs that crowdfunding wouldn’t be feasible.

Also wouldn’t spend valuable time looking at team ‘buy out’ options: if any of the team are up for that and have the means, which is unusual, they need to do ALL of the work, and fast.

Given your and your family’s situation, would now look to sell the business asap, taking advice from any local services available. Would just seek to get the best possible price you can, quickly, in current difficult circumstances.

You’ll need to set aside your beliefs about the business worth and concern for employees and the community: employees will need to take decisions for themselves.

Otherwise, if you don’t resolve this asap, there’s much too high a risk of a change in your condition leaving your DH having to deal with the business matters and sale, on top of everything else. This would be worse for everyone involved.

Yes. You're right. I don't want you to be but you're absolutely right. Thank you.

It might be worth looking at what the Mountain Cafe/Bothy Bakery in Aviemore did - it’s not an entirely similar situation (they lost their long established and most excellent cafe due to COVID, and have now set up new bakery) but they did a [[https://www.crowdfunder.co.uk/bothy-bakery crowdfunder]] to help with that, offering various degree of ‘reward’ for people who donated. I’m mentioning it because they had what sounds like a similar place in their community and there was, and remains, enormous goodwill towards them both locally and wider, due to their original position in a tourist location.

Best of luck, I hope you can get things to a place you want them to be.

I’m sorry about your diagnosis op. My husband had a similar one recently and has had to sell all of his equipment and close his business, so I understand how painful that feels.

However unless this was set up as a community enterprise / charity venture with proper governance and trustees, I don’t think it would work. You probably value the business and what it does for the community / staff much higher than they do (understandably!) but I don’t think you can expect others to chip in to buy your business like this.

Am v sorry

I don't want to employ a manager and respect that's what you might do but it's not what I asked. I'm investigating ways to allow my staff to take it over to ensure their futures and give something back. If it's too complicated or not possible I'll just sell it

I'm so sorry that you're in this situation, you've so much to think about and consider, both personally and professionally.
I would worry about staff buying it out and making a success of it, you mentioned a manager hadn't been successful but the staff are going to need a manager, someone has to be in charge and answerable.
To ease your stress I'd be looking for a buyer and hope that the staff are looked after, they'll decide whether they want to stay or go.

If the business is worth buying, there's no reason why the current employees couldn't get a business loan in order to facilitate buying it. Especially as you are happy to sell at a third of its value.

I wouldn't donate to something like this.

Are you in the Midlands? If so I know someone who is willing to invest

Dozer is right OP. Sorry.

I think your focus is all off kilter. I'm going to assume the business is pub, I own a pub too OP, it's been really effing tough this last year or so. I'm sorry about your position, it's really shit, but you need to focus on you and your family.

If you are currently the manager, who wold fill the void if the current staff bought the place? If they take over the business they need to find the funding and agree to the Ts & Cs, you can't do all that for them. So for instance crowd funding, they need to be in agreement with the interest rate they will pay etc. If they are not capable of putting a package together then maybe they are not the safe pair of hand you think.

Someone will buy it for a fair price. There are people buying up loads of pubs to create a chain at the moment being backed by venture capital. As someone mentioned upthread, you could approach other businesses in your area to see if they'd like to expand.

There is the option not to take all of the money upfront. They could pay half (or a %) now and then pay you off from the profits. But I think given your position I'd suggest getting out completely

Not a pub and not in the midlands but thank you

It's a tricky one - also people will only pay what they value it at, which could be very different from what you believe it is worth. I would get an independent valuation and put it up for sale.

You sound like a lovely boss

I think on a CF site the appeal for funding would need to come from your employees saying "our employer has to sell her business because of ill-health and has given us first refusal at less than market rate and we need help to buy it" rather than you going on and saying "give me the money and I'll hand the business over to my staff"

Can't the 10 people you employ buy it?

I’m a bit confused. You need the money back. You can’t afford to lose it. And you turned down offers you said were half of the worth? But you’d sell it to employees for a third?

So sorry to hear your diagnosis.

It's not something I'd donate to. It's a business and only worth what someone is willing to pay for it. Good luck selling it, you don't need this stress!

Auchrannie resort on Arran was sold to staff a couple of years back, they might be willing to discuss how they did it?