Are we mad to set up a new business in the current economic climate?

[hattyyellow]

DH and I are currently both self-employed and both work part-time and share the child care for the rest of the week.

He works privately as a physio. He's been offered the chance to take on a new contract at a new health clinic, whose USP is that they have lots of relationships with local companies.

The companies either subsidise or completely cover their employees treatment costs at the centre - as a nice perk to their staff or for those staff who have very physical jobs (ie builders) to keep them fit for work/get them back to work.

This could work really well, providing a steady stream of patients.

But we're both really worried that if he takes it on and financial climate/recession fears come true, that the first thing the corporate clients will cut back on is perks like subsidising a physio.

The area he's planning to set up in already has a number of health clinics - so he could struggle without corporate clients and just trying to attract private clients who live/work locally - particulary if local residents are also feeling the pinch and letting go luxuries such as seeing a physio/preferring to wait for an NHS referral.

The contract ties him in for 3 years and he'd need to be there most of the week and keep paying the rent whatever happened. I'm also due with another baby in December so he would be starting work a few months before we went down to one income for at least 4-5 months.

Any thoughts very much welcomed - he has to decide very soon and we're just going round and round in demented circles!

Accountant sceptical - seemed to think that they would ask for personal guarantees/assurances and that if DH refused to give them they would not want to work with him..

He's submitted today an initial proposal of interest for working there, without committment.

Thanks for all your thoughts Tracey - his current clients are an hours drive away so wouldn't transfer to the new clinic. I don't think he would be able to sub-let the room as if he was struggling I think that would put anyone else off taking it over..

His current contract is just a month's notice for him and 3 months for the owner. Apparently the other guy wants to do it alone and DH would want to to, as he could take on an assistant for the days he's not there if it worked well and therefore be making a lot more profit...

At least we need to decide in the next week - I've even started dreaming about it all!

If he goes to the clinic and has to pay F/T rent then does he have to work there F/T to make it pay. Which means giving up his current income...

How about letting the other mug guy take on the contract (and therefore the risk) and your DH offers to sub for him? DH then keeps his current clients and has the chance of extra income (if it suits him and on his terms). In fact, is this the only clinic in the world? Is there a whole market of subbing sole-traders / holiday cover out there?

Actually, the more I think about it ...

In my experience, there are an awful lot of older business people out there who would love to sell up and retire. The trouble is that there are not enough people in the next generation with the right skillset to take over. Does this apply to DH's profession? (or is it just a WestMids industrial trades thing?)
Are there many retirement-sales around - with a proven track record of income (not pie-in-the-sky projections like this clinic) and without onerous liabilities? When Darling was having his will he/won't he sheenanigans with Capital Gains Tax, there were a lot of people looking to sell up. Having once got excited about the thought of it, there must be many who are now hankering to retire.

I didn't mean sub let to another physio - I meant to another type of therapist - or is he tied into the unit being for his sole use. or what is it you do - could you use it later on if it wasn't utilised fully - or could he share it with another therpay?

Has he looked at how many actual appts he would need each day/week to break even - maybe in black and white like that it would be feasible/no chance if it were 1 appt a day or 30 appts a day.

Has he considered chasing businesses round where he is just now for the same kind of employee subsidy deal - but at his current place?

Cheers all. Still no decision! Have a friend staying this weekend who is a business analyst so might just let him sit down to a cup of tea before we let loose an onslaught of questions!

Unit has to be for his sole use only. Only the person who signs the lease can work there. He could try and find someone from another related field to take over, but if he wasn't doing well I imagine they would be sceptical about taking it on?

There are goodwills for sale but they come up rarely.

Has looked at corporate deals where he is now - but it's a much smaller place.

Has broken down figures to work out break-even point but as theres no history of patients it can only be guesswork as to whether he would meet that minimum number/not meet it/easily meet it.

Hi Turnip - the contract looks very standard, there's no specific mention of advertising spend - I think that's the difficulty it's all promises and projections and no hard facts because it's all new...according to DH this is very standard in his industry though...

He would pay rent a month in advance, so if they did go bust I guess he could sue for his rent back or at the very worst would have lost one months worth..

Is it d day tomorrow Hatty? Have you decided yet?