How to Invest in a Small Business
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    melaniepip
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    How to Invest in a Small Business

    by melaniepip » Wed Jun 22, 2022 9:43 am

    Long story short.

    A family member is being made redundant as his boss winds up his Tree Surgery business. They are busy and profitable but the owner has his finger in other pies and has built the training and consultancy side of the business to a point where he feels running a team of lads, pricing jobs, looking after vans and machinery etc... is not worth his time. Fair enough.

    My family member is considering going solo and is confident he could pick up a good chunk of custom from his old boss, thanks to a good relationship between them both and the customers - family member is/was the lead guy on site most days so dealt with more than trees.

    Unfortunately, he's not got the capital to buy the tools, machinery, van, insurance etc... that he would need to get going.

    My position - I'm in a well paid job but not doing something which I want to do forever, so have been setting myself up an exit plan over the last few years with various investments here and there. I know nothing about tree surgery/arborists or even small businesses, really.

    My idea, which I've floated with my wife but not with my family member, is that I stump up some/all of the cash to buy the machinery and bits he'd need to get started.
    My worry - how can I do this in a way that neither of us get burnt or destroy the family biggrin
    I don't want a gentleman's agreement where I hand over £x and just tell him to give me back £x+10% a year... but I don't want to get so legal with it, that I end up running the business or putting (too much) pressure on him.

    This must go on every day; what are my options? How could a return be structured? Am I best buying a xx% stake in the business and sitting back and leaving him to it? With a handful of meetings a year to keep on top of things? Or would getting my capital back +x% a year over x years, be better for either/both of us?

    Any points I need to consider are welcome. Early days so just brainstorming.


  • DianaGibson90oXM
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    Re: How to Invest in a Small Business

    by DianaGibson90oXM » Wed Jun 22, 2022 12:15 pm

    I have no idea. I want to start a business but idk how.
  • EdinStops
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    Re: How to Invest in a Small Business

    by EdinStops » Wed Jun 22, 2022 12:16 pm

    It would be a great idea to do a small business. It is not necessary to have all the capital to start a business. That's what loans are for. If you build the right business, you will see that it will be very easy to repay this loan, and you will also have a very high income. Most people in business, even me, build businesses on credit. But besides that, they have very good financial planning. I received very good financial planning from the financial advisor at https://www.humaninvesting.com. Thanks to him, I invested correctly in my company so that it would not go bankrupt and I would have a good continuous income. If you have good financial planning, you don't have to worry. Everything will be fine.
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    FederikFer
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    Re: How to Invest in a Small Business

    by FederikFer » Tue Jul 05, 2022 12:53 pm

    I think to invest in a small business, you need to start a firm first.
  • JOgden1987
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    Re: How to Invest in a Small Business

    by JOgden1987 » Tue Jul 05, 2022 2:19 pm

    I believe that now small business is not relevant and not nailed down, I studied a lot of information, you can click here to find out more. Most representatives of small businesses work in mass segments: trade, services, and catering. The competition in these niches is so high today that you need to think many times before entering there. Around the first half of the 2010s, this model finally broke down. In some industries, it happened earlier, in some later, but this trend is relevant for all mass niches. Now entrepreneurs with significant experience in their industries need to "work from morning till night" to ensure a minimum level of profitability, while newcomers have even harder.
    Last edited by JOgden1987 on Sat Jul 09, 2022 10:15 am, edited 1 time in total.
  • nonp2wtech
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    Re: How to Invest in a Small Business

    by nonp2wtech » Wed Jul 06, 2022 1:36 pm

    How is the business going now melaniepip?

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