To think you can buy a business without having much prior knowledge about how it works

[Wetbankhols]

DH says you can't, but if the business is already running, surely you can?

No, you're not pissing on anything :) it's just hard to know what sort of experience you should have, before embarking on something like this.

I heard on BBC moneybox this week that a lot of care homes are struggling financially due to impact of the living wage, cuts in council funding and greedy private equity investors extracting money somehow.

Just because people have done well in the past doesn't guarantee future success.

But on that theory, no one would ever buy a business (its not a care home by the way)

If you don't know what sort of experience you should have to run the business then don't buy it. You might as well just set fire to your cash.

No, you misunderstand me - you don't need any sort of experience, however what I was asking was hypothetically what should you need.

No. DO NOT do it. Especially if in catering/retail/hospitality. people who do this crash and burn. daily

I did it in September.

Bought a coffee shop/soft play

I run it myself and it's been a steep learning curve. But so far it's way more successful than it was when I acquired it.

So here's hoping that continues

I don't suppose that's quite as complicated tho.

I'm doing this! Yes, you certainly can buy a business without much prior knowledge. Having practical knowledge about the legal elements is essential, as is being able to provide a secure employment for your employees, but the rest you can learn as you go. It's important to have a transition period where the old owners teach you the ropes.

In my case, my business is a highly skilled mechanical industrial firm. I actually have no knowledge at all about that side of things, although I'm up to date with legislation and health and safety. The problem with it is that you are responsible and have to be held accountable should anything go wrong, so your employees have to be top notch.

It does work, but the key is knowing and accepting that your employees know more than you about productivity. And be very willing to learn, good luck.

That's great, Pants and Purple!

I imagine I would need an accountant.

I imagine you need your bumps felt. You have no idea at all what you are dong, not just about the specifics of the business but of owning, running, making a success of a business.

If it's a few grand you can afford to lose, then go for it if it's something you really want to do, but if it's signfcsnt money that you can't afford to lose then you'd be mad. Absolutely mad.

You can but shouldn't.

The management can take care of the day-to-day running but when major changes are necessary, it comes down to the owner / board.

There's a reason it's called a career ladder. You work your way up and you should be aiming to be in senior management before branching out into your own business.

Can you afford to lose the money is another question you should be asking if you'd be buying it outright. If you'd be remortgaging then what would happen if you lost the house. Following on from this, if you need to borrow the money, are you able to show experience and business plans to the bank for them to approve the loan? From your posts so far, I suspect not.

The company I work for was bought as a "present" for the owners wife.

She had no idea how to run this business but they employed a general manager - who she then tried to micro manage without giving him any responsibilities. He couldn't approve anything without her say so.

She cut all overtime (changing it to toil), removed the very small expenses budget and made us office based rather than being able to meet people in a cafe/their place of work/home as she refused to pay the mileage.

The business limped on for about 10 years, with a huge turnover of staff. She has stepped down now after admitting a huge loss - the company is allegedly owned by the bank and they've brought in a new manager - one who knows what he's doing!!!!

So my advice is if you go ahead with this, you admit you don't know the business, give the manager a free rein to run it without you interfering!

OP....

Reading this thread, it looks as if you are looking for an alternative income and a way to sort out your future. Please be very careful. Everything said above about the difficulty of running a business is all too true. A business balances on three legs, selling the service/product, delivering the service/product and counting the money. You can be mediocre at all three, but if you are fundamentaly weak at any one you will fail.

Can I ask you a simple question? Please answer honestly off the top of your head.

Do you know off the top of your head how much money you have in your bank account (to within the nearest £10) together with how much you have on the credit cards and upcoming big bills?

If you can honestly answer yes, you have at least got a chance of controling cash flow. Then you have to sell your service. Finally in order to actually provide the goods and control the most erratic and awkward things in the universe... people...(look at all the threads about unreasonable behaviour).

Thereall, I would

That said, I'm not completely ignorant and I know a fair amount, and am going to do a college course as well to give me a relevant qualification. However, the business side of things is what I need to brush up on.

I'm not remortgaging, or getting a loan.

To my surprise, Professor I can answer yes :) which is a pleasant surprise.

I wouldn't be looking at starting it completely from scratch. There is already a manager and workers there and I'd be happy to let them get on with it :)

if you buy the business part of the deal should be that the vendor works alongside you for the first month to assist you in the handover period

Reading what Thereal.. wrote...

You still have to manage your manager if you decide to employ one. Managing even one person is difficult and soooo much rests on getting it right. You must also make sure the business has enough profit, (for which you have to understand a P&L) to pay a manager and give you some income after.

Franchises are money pits.

A manager would be needed at first, certainly, and yes this would obviously affect P & L. However, it certainly seems to be running v profitably at the moment.

If all you want to do is be a shareholder then fine. If you want to have a say in the running of the business with no prior experience then you're setting yourself up to fail.

Wetbankhols..
That begins to sound more promissing. (My dp just asked me how much money we have in the bank and I honestly answered no.. they do the cashflow not me).
Now some more...
Why is the business up for sale?
What comptition is in the local market?
Where in the country? (think about taking on something in Port Talbot)
Can you say what sort of business it is? restaurant, b&b, accountancy, engineering, car repairs, taxi, .....

It's for sale as the owners are retiring.
Competition in the local market is varied as although there's a few care companies, there's also a lot of people needing care, and I know they've had to turn packages away in the past.
(Don't want to out myself so I won't say if you don't mind!) but not Port Talbot!
It's home care.

Mutton the former, really.

I'm glad you're looking at getting a proper qualification - the home care agency can be really complex...

Remember, if you are going to be the Responsible Person (separate from the Registered Manager) it really is up to you to ensure all staff have adequate training to be safe (make sure you get good Safeguarding Adults training that incorporates the Care Act and local arrangements) and that you staff sufficiently for contingencies (so people don't go without care at Christmas or August or during a flu outbreak). You can delegate but the buck stops with the proprietor.

You can make a big profit but it's a big responsibility. If you do hire a manager then treat them well so they want to stay and have a good deputy trained to take over in case they don't. I work with vulnerable adults and the one of the biggest warning signs about quality is a high turnover of managers. A new manager will always start on the back foot! And it's sometimes a sign that the manager wants to get extra training or resources to improve quality but the owner won't pay for it... Not suggesting that's you but rather that an experienced manager is worth their weight in gold!

Make sure you've read the last few CQC reports to see if there are any issues you'd be inheriting - poor quality assurance or training of existing staff for example.

A home care agency, I meant.

I honestly don't mean to put you off. The industry needs engaged owners and it's such an important job! These are just some issues to bear in mind.

Thanks, that's really, really helpful.

My biggest challenge at the moment is finding a college to do an NVQ at!