BusinessWings.co.uk

After years of experience in buying and selling other people’s businesses, Andy Daniel decided to dive in and buy his own.

It was something he planned to set up for his retirement, so he could take things a little easier but carry on working at the same time.

He has always had an active interest in photography and wanted to do something in the art field that would complement his passion for art, and so started looking into buying an art gallery.

“The art business is something for later in life," he explains. "My work life at the moment is very hectic and in the future I want to alter my work patterns and slow down a bit. I also want to move into a more home-based environment and I thought that an art shop or gallery would allow me to do this.”

Andy has spent a lot of time on BusinessesForSale.com looking for businesses for his clients and it was the perfect place to start looking for his own business.

His search initially led him to potential business opportunities in Walsall and South Manchester. But really, he was looking for something a bit closer to his hometown of Nantwich.

He came across a framing gallery actually in Chester and spent six months negotiating to buy the business. However, the turnover had dropped significantly during that time, and that, combined with one or two other things that weren’t quite right, was why they declined the sale, despite going to contract.

Online partnership

While all this was going on, Andy had seen an online gallery and thought that the two businesses would work perfectly together. Despite the deal for the business in Chester not going ahead, the purchase of Wall Space was more successful.

“When I saw the website on BusinessesForSale.com, I thought that would be a much better option for me. It would be a slower start and something I could do as and when; I could take my time over it. It was cheaper than buying an actual art gallery and would also be less work.”

The business was located in Berkshire, but being an online business it was fairly easy to relocate.

“We ended up driving all the stock up from Slough in a van to my house in Nantwich. There was quite a bit – about 128 paintings in all and most of them were framed.”

Homework

Andy did a lot of research before going ahead with the purchase, mainly because he was moving into unchartered territory.

“The previous owner sent us a list of all the stock and we spent a lot of time looking at other art sites, comparing prices and making sure we could sell the stock we had for the prices that were recommended," he says. "We did most of our research on the internet, finding out how well known the artists were, and what the sales prices were for similar products on other sites.

“The asking price was £20k but we paid £9k. The price we offered was based on the research we did.

“We also had to do a lot of work on how to trade on the web because we had never done anything like this before and it was all new to us.

“It took us four months to complete the deal while we were doing all the research and due diligence. We spent a lot of time looking into domain names and worked a lot with Nominet (one of the internet registration sites).

“We also sought advice from web designers about what we would need to do about hosting and various other things, again because this is something we knew nothing about.

“We talked to Business Link about grants and funding but because it was web-based there wasn’t much available.”

Experience the key

Andy wanted to be as thorough as possible and to make sure everything was in place before signing the contract.

“I’ve bought and sold and closed businesses down in my work life for many years and so it was imperative that we did things properly. l emphasised the need to have a formal changeover. We drew up official contracts of sale, consulting with lawyers during the whole process. This is something I was very familiar with.”

His experience clearly helped him. Andy says he didn’t really have too many problems during the whole buying process.

He adds that the main problem was the previous owner wanted too much for the business when he hadn’t done an enormous amount of work in getting it started. Although he had acquired everything, he wasn’t actually trading. Having said that, Andy reveals the seller was quite open about everything and the fact that he hadn’t stated trading.

“The negotiation was about standing our ground and making sure we didn’t pay more than we should. He was very reluctant to sell at the price we were offering and on more than one occasion he told us there were other people interested. We just told him to sell to them if he thought he would get more money.

“We were happy with the all the products and made sure we saw the stock before we bought it. I think our biggest risk was always going to be how much it was going to cost to get it hosted and registered, but once we had done our homework we realised it wasn’t actually going to cost that much.”

Business is booming

Eighteen months on from the sale and Wall Space has sold several paintings.

“To be honest, we didn’t expect it to do very well in its first couple of years but we have sold more than we thought. We’ve also had several artists come to us and ask us to put their work online – we’re not short of stock and that’s great.

“We are going to spend some time now working on raising the profile of the site. We need to get more hits and we are looking to develop web sales and general awareness of the site. I’m working on increasing its search engine rankings,” he explains.

“For me, running the business is a long-term thing and I am working on this as well as continuing with my day job. Do I think I will give up my day job? I like to think eventually I will, but I don’t know about that just yet – maybe in seven or eight years time.

“At the moment my immediate thoughts are to get the turnover increased to a certain level and then it will be something for me to concentrate on during my retirement.

“I think when you buy a small business yourself you really have to get a deal together that is right for you. You cannot compromise. I think sometimes sole traders tend to have a higher esteemed value of what a business is actually worth and often price it according to that.”

Andy concludes: “Taking as many precautions as we could and doing so much research was our way of making sure that what we bought was really worthwhile.”