Business advice - not sure what to do

[DressingGown87]

Hi guys, just wondering if anyone is able to give me some business / impartial advice.

I have a company. Which is just something I do 2/3 evenings a week, which is not my FT career. The business had an approximate TO off around £20-£25k last year. Very little running costs. This was also with me reducing the scale from previous years, due to changes in personal circumstances.

My friend currently helps me with the business. I have recently found out I’m pregnant, and high risk. So with COVID-19 I have stopped trading, as I’ve been advised by my midwife to isolate at home. Also I wouldn’t be able to “mingle” with my friend to continue running the business, as we are seperate households, and I can’t do the lifting alone. We would be able to do a lot of trade whilst lockdown is on, as the business could still trade and social distancing would be able to be adhered to.

I have been approached by someone to purchase the company, or more the name / social media presence. I don’t live in that area anymore (moved last year) but it is still within travelling distance.

Last year I got a company to value the business this was valued between £15-£20k, which seemed on the High side (IMO). I advertised, and did not get interest anywhere near this price, the business is quite location specific too, which has to be factored in.

Now my questions are;

1. my friend says she could continue the business, as I won’t be able to even once the baby has been born. But she ideally wouldn’t want to travel that far, and their is logistics issues with the size of their vehicle, and it will still be stored at my property, and I would still have to have some involvement.

2. if I sold the company how would I get a realistic value? I have asked the potential purchaser to tell me, what they are willing to pay, and they have asked me back, how much I want?

My thoughts are to sell, give me a small nest for the baby and to help me whilst on maternity (I’m a single parent). Give my friend a lump sum, so she could purchase some replacement goods, and so she could set up a new company in her location.

Does this sound reasonable? And how would I go about negotiating a price? I see this as a prime time to sell, as there is high demand for the service.

@sophiehalpin

Thank you for your reply.

The business is a hire company of an outside leisure good. Great for “home” hen parities, birthday parties, family time, without the all round running costs and maintenance of what could be deemed a luxury item. It’s popular during the summer months, but also popular during winter and Christmas period.

There is potential to grow the business. However my full time career and transport wouldn’t allow me to do this. We do not actively advertise the business, because we are busy enough without.

I’m also going to be a single parent, so I wouldn’t be able to run the business in the evenings as I currently do. My friend whilst a great help, also has children of her own. It does rely on us setting up the equipment at peoples houses, so couldn’t be automated.

I just don’t know how I would advertise the business for sale. As stated it’s quite location specific, although there are a number of these companies around the country. The main “asset” to the company is the social media platform, which is based on reviews, recommendations in that specific area. We had tried directing interest to a new location before, when I moved, but still find that 95% are in the old location.

Look forward to your response, again thank you.

Would there be any scope to hire someone to do the setting up bit and you retain the business side? It sounds like it could be really successful, personally I wouldn't think about selling.

When your baby comes will you want to go back to your Ft career? Is there a chance you would want to do this side business only?

@doadeer I’ve thought about that and me doing administration / booking role. But I think I’m at a place where I would like to cut ties, if a buyer could be found, for the right price.

I will be returning to my FT career as that’s what I love, and trained so hard to become. I also have another company which works along side that (working for myself) which my employer knows, and that would be my go to position if my employment was terminated for any reason.

I think reality of juggling a new norm on my own, returning to FT, and running two businesses wouldn’t be feasible.