Hello Every one, As we know the economy is very up and down at the moment. Every person is in a different situation as well. We own a small business and I work full time as well. Our Business has slowed down and we are getting a bit nervous. We do have the shop on the market it’s a tattslotto store and it should sell but the question is when? Our Situation: (For home)· Home Loan: 109k – Where we live – House valued at 420K by bank· What I earn 65k a year – My wife earns about 45k from the shop· Other loans or personal debt nothing · Personal living situation – Very good· I work In the shipping industry doing sales and marketing and a lot of people are getting laid off for example a couple of people have been sacked already. Our Situation: (Our shop)· Shop on the market for the last 3 months it could sell soon but I guess we don’t know· Things have gotten tight and our loan is pretty big for our business (560k) 285K loan interest only (Repayments 2k a Month) + 276K P and I (Repayments 4k a Month) What would you do!!
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Sell it, pay off that business debt, get your wife working, she can easily make 45k a year, pay off your mortgage.
Sell.
I agree with both. We have put in the market but its been slow
any one want to buy it lol
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Can you add value to the business? Reduce the floor space you need and rent out the remainder.Refinance the loan to an interest only loan; that will reduce your monthly payments by about $2,000/Mth. = cash out reduction of 25%…not to be sneased at. This will also make it more attractive to a buyer if the business cash flow is reduced. Reduce other costs as much as possible. This will also make it more attractive to the banks to provide finance to a new buyer.
Once you have removed the business debt, look at using the equity in your home plus the 'profit' from the sal of your business to really devote your time into property investing. I am sure thatyou can easily replace the $45K/Yr with 1-2 small reno deals.
You need to set yourself up as if you have already lost your $65K/Yr job.
colinnewland wrote:Can you add value to the business? Reduce the floor space you need and rent out the remainder.Refinance the loan to an interest only loan; that will reduce your monthly payments by about $2,000/Mth. = cash out reduction of 25%…not to be sneased at. This will also make it more attractive to a buyer if the business cash flow is reduced. Reduce other costs as much as possible. This will also make it more attractive to the banks to provide finance to a new buyer.Once you have removed the business debt, look at using the equity in your home plus the 'profit' from the sal of your business to really devote your time into property investing. I am sure thatyou can easily replace the $45K/Yr with 1-2 small reno deals.
You need to set yourself up as if you have already lost your $65K/Yr job.
Hi colin
i agree with you: we are in the procceas of restructing the loan
i really want to focua on property and also create a postive income
once we sold were only moving fowrad to greater.and better thingsJpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Your kidding us right?
You have a business with a 530k loan that puts $45k in your pocket every year and pays loan costs of 6k per mth.
And you want to replace that with an IP. Show me where you can get an IP in this market that does even close to your business figures for the capital involved.
Extremely hard to make an IP worth more – all have a maximum value regardless of capital invested. Businesses on the other hand have unlimited potential.
I wouldn’t consider selling this business at this point. A buyer will simply look at TO and see it’s falling. Nobody will touch you unless you discount heavily.
I would really have a hard look at the business from top to bottom. You need to analyse all aspects of its performance, measure that against other like businesses and figure out which parts are under performing. You would then try to either eliminate those cost centres or replace them with known better performers.
TattsLotto are we talking newsagent or mixed business or something else. If you fill in a few blanks I can give you better ideas and info to consider or check out
Don’t panic!! There’s lots of scope to fix the business even if it means diversifying or reorientating etc.
Nokia started off as a paper company then bought into rubber then electronics before making it’s mark as a cell phone maker. Businesses are like shape shifters. You can turn them into anything you like over time.
Jack
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