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!

@Lumpwoody

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?

Yes. I appreciate it doesn't make me Alan Sugar or Richard Branson here (thank f*ck) but the person who we dealt with for ages and believed to be a great fit for the staff & community mucked us about for 3 months and then halved their initial offer because they heard of my diagnosis and announced I must be in a hurry to sell.

I'm not.

And if that's how they were going to treat me I can only shudder at how they would have treated the staff.

This is not a usual business. We are a team. They are like family to me, as are the customers. If that makes it a ridiculous decision to take less money in order to hand it over to the people that support and care about it then so be it. That's just how I roll.

The logistics for your plan don’t work.

Firstly no one in their right mind is going to crowdfund for a business. Community gem or not!

Secondly handing it over to staff.. equal shares? Who’s in charge? In fighting? Selling shares after time? Wanting to make changes etc.

Thirdly a business is only worth what someone os willing to pay at this time. Where have you plucked a 1/3 figure from?

Sorry you are in this position but I would be most unimpressed if I was a member of the community.

@WorriedWishingWell

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"

Yes, I think so too.

@ChocoChocoLatte. I'm very sorry to hear about your situation 💐 you really need to do what's quick & easy. Spend your time & energy on your DH & DC. Xx

@stillcrazyafterall

Can't the 10 people you employ buy it?

No, they're not in a position to do so. I have only two full time staff, the rest are part time (their choice) to support their life styles and not in a position financially to buy me out.

I naively thought if we could raise money to buy out my initial investment, it would allow me to pay off some bills here at home and reduce my need to take an income. I would help as much or as little as they needed BUT they wouldn't be directly reliant on me and I could ease off a little.

I think the way @WorriedWishingWell has phrased it is much more appealing and I hope you can garner the same affection @Huckleberries73 describes.

I think you probably need to have a big think about if you can help the staff lead a crowd fund/buy out idea - or better find someone else who can lead them - or find a buyer. But in your shoes, I do think you need to put your health and family first and a buyer would probably be more straightforward.

I realise that's pretty much what you came on here seeking . Perhaps you do need to 'go public' locally and see who emerges?

Rather than a crowd finder have you looked at a Kickstarter. A few local businesses near me have successfully raised money this way.

My understanding is that you are basically selling vouchers for things that a customer wants to be used later.

Then money only gets released when you have hit a capital target which is enough to move forward.

Your staff team could raise the money to buy you out.

@Jumpingintosummer

The logistics for your plan don’t work.

Firstly no one in their right mind is going to crowdfund for a business. Community gem or not!

Secondly handing it over to staff.. equal shares? Who’s in charge? In fighting? Selling shares after time? Wanting to make changes etc.

Thirdly a business is only worth what someone os willing to pay at this time. Where have you plucked a 1/3 figure from?

Sorry you are in this position but I would be most unimpressed if I was a member of the community.

Aye cheers jumping - there wasn't a plan as such - I was just asking for some guidance/advice.

I work with my bookeeper and accountant - I don't go around plucking numbers from thin air. The figure is what I initially invested. No where near what it is worth after 10yrs of building it up and yes we have taken the effects of lockdown into account and reduced the figure we were hoping to sell it for.

Covid19 has knocked us all on our ass, I'm fairly certain I'm not the only one in this boat.

Lets hope you manage to move to a nicer community at some point, preferably not ours.............

@palindromeam

Rather than a crowd finder have you looked at a Kickstarter. A few local businesses near me have successfully raised money this way.

My understanding is that you are basically selling vouchers for things that a customer wants to be used later.

Then money only gets released when you have hit a capital target which is enough to move forward.

Your staff team could raise the money to buy you out.

Thank you @palindromeam. Maybe crowdfunding was the wrong term. I'll look into that.

@Huckleberries73

I am really hoping that you are not who I think you are, and often post pics of scones on a wall?

if so - I think that all the answers here are wrong, I think that the community would absolutely rally to make this happen. Based on how well regarded you are as a person - and how well the place is regarded.

Hello. This was very difficult for me to post and I appreciate your discretion, thank you. You've made me cry with your kindness, thank you.

I agree that those on here with no knowledge of our wonderful community can't fully comprehend the feelings behind it all.

I also agree I haven't come up with the ideal solution and the village deserves us to be back to what we used to offer. I just can't be the one to do it unfortunately, as much as I'd love to.

What I was getting at - badly obviously - was that it weakens your crowdfund - you want x amount for your initial investment that you need returned for financial reasons, won’t sell for y amount, but will give to staff in some way for z amount which is less than both other options.

Sounds very difficult, OP. Do you have anyone in your existing staff (or who is otherwise involved with the business/local community) with the leadership and management skills, and the drive, to take this project on? If so, there is a clear way forward here which could well involve crowdfunding. If not, I can't see what you can do apart from sell out to an external.

Speak to your accountant again, they may recommend a more specialist advisor to look into other ways of structuring an MBO to allow the business to become employee owned.

Unfortunately lots of people have to sell business they've put a lot of time, effort and money into but it's your job to sell it. I wouldn't put money towards you giving it to the right people when it won't benefit me or anyone but you. If someone really wants it and sees it as a profitable business they'll buy it. Whoever takes it over could make it a lovely community benefitting business, but I doubt people will be interested when there are other alternatives that could benefit you.

I think it so depends on your business and your community OP. My parents live in a really busy, community-minded village which is also rural enough that places like the local bakery/cafe are really important and well-supported. It is in everyone's interest it survives. If you are running something like that, you absolutely could crowdfund, I think, because it would definitely be in the interests of the whole community (including many vulnerable, lonely older people) that it continues to exist. But I think without people knowing what you run and without inside knowledge of its role in the area, then I can see why the advice on here is don't go down this road.

How many regular customers do you have? How big if your village/town/city? If you do run a crowdfunder (well, really your staff/people in the community need to organise it and they'd need to have some energy and enthusiasm and get things together fast) then I wouldn't expect people outside the area to donate but locals, yes.

I'm really sorry about the shit situation you find yourself in. It's a lot to be managing. I hope you find a solution with the business. Definitely put yourself first though, you need to make the most of the time you have left.

You need someone with the leadership, skills and vision to take this forward. I would also say you need specialist advice. Is there a business support service near you?

1. I don't think having a business owned by a community of sorts is going to be simple. People wont have money to invest if money gets stolen, roof falls in, oven breaks. I think it needs a singular backer or a duo. As awful as it is after covid, you've been able to dig deep on reserves - keep everything going etc. If you are scraping pennies together to keep the business joint owned - there's no reserves there.

1. I think your efforts are better spent investing in finding the right buyer. Make a cheesy little advert, ask your community to share widely, hopefully get a few interested parties and get someone with a bit of cash who would enjoy a hobby business. Off the top of my head I know of 2 people who could be tempted to purchase what sounds like a lovely, valued business - iff it was openly advertised and local. This would also be the least effort for you. And if it did go locally viral you would probably be able to have a few people to choose from and get a fair price.

Something like a spoof Tinder profile - Small community cafe with great buns ISO hungry owner with spare time on their hands.

I would investigate funding for community pubs as it sounds as though a similar strategy might work for you.

An important factor here is time: your time is precious.

It could eat up time trying to find ‘ideal’ or even ‘better than other’ solutions. Would be better to just take advice on price and sell asap.

Even if that means a buyer with different ethos, who’d not keep staff on etc. You and family needs and income must come first.

Your personal situation could change at any time, and should that happen it’d be awful for your H, and indeed others, to have to deal with this - and any feelings he has associated with having to take hard decisions. Even with power of attorney etc He too would have limited time and energy to seek good solutions.

OP, now you've confirmed this is you, this is quite outing - I have just searched Facebook and am fairly sure I've found your company's Facebook page. On the plus side, it's a relief to see you're genuine (sadly, Mumsnet often attracts "begging threads" from dishonest sorts - you are clearly legit), but the downside is that you're now easily identifiable.

Your business looks lovely. I wish you all the luck in the world going forward.

@StoneColdbitch there isn't anything on this thread that wasn't common local knowledge anyway. Owning a small local business means nothing is private but I'm exceptionally lucky to be placed in such a wonderful, supportive, caring community. I couldn't have asked for more. Thank you for your good luck wishes.

@Huckleberries73 absolutely no apology necessary but thank you.

I do not know where your business is, but I am sorry that you are facing this. Reading through your posts I hear that you want to do the best you can for your staff, customers, wider community and provide for your family whilst not placing a burden on them. This is your vision of the future. You already have an outline.

Could you, maybe with your staff, work on a more detailed description of the vision. It is so helpful if someone else could facilitate this so you can focus on thinking about the questions. Someone amongst your community probably has the skill to lead the session if you ask, and will say yes due to their warm regard for the business and empathy for your circumstances.

If you explore your vision together, hopefully it will generate lots of enthusiasm - does a person / people emerge? You really need a leader or a cohesive small team that work well together, perhaps amongst your staff, with the drive and experience to pick up the reins.

Then do a brainstorm of all the resources the team has to make this vision happen and what then make a list of what you still need. This can be physical resources, networks, money, time, skills. It might be that your staff want to be closely involved but need a leader. If you are loved by your community there are likely to be skills and connections amongst your customers if you put a call out.

Once the team has worked out a clear vision and has identified what is still needed to make it happen, you can then think about the detail of how to fund it. This is the part where some professional advice would be useful. Would it be a not for profit? Meaning that the business can still make a surplus but it is ploughed back into paying living wages and other social benefits rather than dividends for the directors. This opens up some more diverse funding options for taking things forward. Crowdfunding may work but grants, or community shares, or even a loan may be an option. It may require the team to set up a new legal entity.