Podcast Summary
Overcoming Business Challenges with Creativity: To grow a business, consider diversifying revenue streams, managing finances, and thinking creatively to overcome challenges. Building an ecosystem around the business can reduce reliance on high-interest financing.
Growing a business involves overcoming various challenges, and sometimes creative solutions are necessary. David Gotts, a car dealer with a monthly revenue of 250,000 and three staff members, shared his challenges with buying a new premises, selling rental properties, and securing financing. James Sinclair, the podcast host, advised building an ecosystem around the business, including MOTs, rentals, cleaning, and servicing, to reduce reliance on stocking finance and its high-interest rates. David currently makes around 100,000 a year, which may not be enough to cover the costs of the new premises. To grow the business further, he needs to consider increasing profits and managing his time efficiently. Previously, David was on the podcast when he was making only 20,000 a year. Overall, the conversation highlights the importance of diversifying revenue streams, managing finances, and thinking creatively to overcome business challenges.
Learn from James Sinclair's Entrepreneurs University: James Sinclair's training program offers business owners coaching, resources, and a free trial to help grow their businesses. Sinclair, a successful entrepreneur, built his business from home and now offers seminars for 2024.
James Sinclair, the host of the podcast, is offering business owners an opportunity to learn from him through his Entrepreneurs University, a training program accessible from anywhere in the world for a monthly fee of 49.99 GBP. This program includes coaching, swipe files, blueprints, and cheat sheets. Sinclair is confident in the program's ability to help grow businesses and is offering a free trial. Sinclair also mentioned that he started his career as a DJ and built his business, The Lovely Car Company, from home, and now they have a turnover of over 2.5 million pounds. Another takeaway is that Sinclair and his team are planning seminars for 2024 to help businesses grow. The podcast features interviews with successful business owners, and one such guest was David from The Lovely Car Company, who shared how he started his business part-time while DJing and has since grown it to a significant size.
Unexpected opportunities from engaging content: Creating valuable content can lead to new partnerships and unexpected opportunities, even in industries with small profit margins
Creating engaging content, such as the car dealer's YouTube channel, can lead to unexpected opportunities and build valuable connections. The car dealer shared how his videos have received positive feedback and have helped him connect with other professionals in the industry. He even received an inquiry from someone in a different geographical location who wanted to partner up based on his content. While the conversation didn't lead to a deal, it showcases how content marketing can open doors to new possibilities. Additionally, the car industry was discussed, with the dealer sharing the challenges of selling cars with small profit margins and the need to provide warranties. Despite these challenges, it's essential to keep turning over cars as quickly as possible and aim for higher-priced vehicles for better profitability. Overall, the conversation highlights the importance of creating valuable content and building relationships in business.
Car dealership owner looking to purchase business premise with garage and MOT license: Car dealership owners can save costs by factoring in repair and warranty expenses, but controlling their own premises becomes crucial as the business grows. Owners may consider purchasing a premise with a garage and MOT license and securing a loan with MAF Finance.
Successful car dealership owners often become their own insurers by factoring in the cost of vehicle repairs and warranties into their business expenses. This approach can be more cost-effective for high-volume sellers. However, as the business grows, the need for a garage and control over the premises becomes increasingly important. In this conversation, a car dealership owner expressed his desire to purchase a business premise with a garage and MOT license to alleviate his stress and maintain control. The premise includes two ramps, two mechanics, a valet, and an admin lady, but the owner plans to bring his own staff and move his stock over. The premise is for sale for $700, freehold, but the current owners would keep their staff and sell their stock. The owner is considering using MAF Finance to secure a loan to purchase the premises and is considering selling some of his rental properties or his house to raise funds. The owner has been in the business for 10 years and has paid corporation tax on his profits for the last two years. The conversation also touched upon the importance of having good bank statements and credit balances when applying for a business loan.
Use property as security instead of selling it for a business loan: Instead of selling your house, use it as security for a larger loan. Keep your house while securing better loan terms. Shop around with a finance broker for the best commercial mortgage deal.
Instead of selling your house to secure a business loan, you can use your property as security instead. This method, known as owner-occupied business finance, allows you to keep your house while securing a larger loan. You can give up your house and other rental properties as security, which typically gives you more favorable terms from banks. Additionally, having a significant amount of security and cash in the bank can make the process easier. A finance broker can help you shop around for the best commercial mortgage deal. This approach is simpler and more effective than selling your house or going through the hassle of getting a business loan and waiting six months to use the cash as a deposit. Remember, you're an owner-occupier, not an investor, which makes a significant difference in the loan process.
Working with a broker for business financing: A broker can help find flexible financing options, save on stamp duty by buying a business with property, and require solid business plans and monthly accounts for approval.
Working with a broker can provide valuable insights and opportunities when it comes to securing business financing. Banks may have strict requirements, such as large deposits or the need to sell properties, but a broker can speak to multiple lenders on your behalf and help you find a more flexible solution. Additionally, purchasing a business with the property included instead of just the property itself can result in significant stamp duty savings. It's important to remember that this process requires effort and work, but a broker should help pick up most of the load. Monthly management accounts and a solid business plan are essential when applying for financing, and it's crucial to ensure that the financing is for owner-occupation and not investment. If possible, buying the entire business instead of just the property can lead to substantial stamp duty savings. The name of the business can be changed after the purchase, only the brand name needs to remain the same.
Entrepreneurs: Take Control of Your Finances: Entrepreneurs should understand their finances, diversify, make tax-efficient decisions, pay commercial salary, have supportive financial partners, and consider true cost of stock loans.
Entrepreneurs should take an active role in understanding their business finances and not rely solely on their accountant or financial advisors. Disney, through its subsidiaries Marvel and Star Wars, demonstrates the importance of diversification and creativity in business. By being aware of your profits and making tax-efficient decisions, you can maximize your earnings. Additionally, entrepreneurs should aim to pay themselves a commercial salary and then make additional profits. It's also essential to have a bank manager who understands your business goals and a finance broker who can provide cost-effective financing solutions. In the case of stock in loans, it's important to consider the true cost, including interest rates and additional fees, before choosing a provider. Overall, entrepreneurs should take control of their finances and make informed decisions to optimize their business's potential.
Optimize cash flow during real estate purchases by selling inventory efficiently and securing a loan from a bank: Selling inventory efficiently within an average of 90 days and securing a bank loan can optimize cash flow during real estate purchases, reduce fees and interest rates, and eventually build inventory financing using own resources.
During the process of buying business premises, one can optimize cash flow by engaging a third party to sell inventory on their behalf, freeing up resources and introducing new business opportunities. Additionally, securing a loan from a bank to finance inventory, at a lower interest rate than the stock financing, can help wean a business off the stock financing cycle and reduce associated fees. By selling inventory efficiently within an average of 90 days, a business can repay the loan using their cash flow and eventually build their own inventory financing using their own resources. Close Brothers, mentioned in the discussion, offers competitive rates and lends up to 80% of a car's value. To calculate potential loan amounts and repayment schedules, consider the average 90-day inventory cycle and the potential savings from reduced fees and interest rates.
Costs of Having a Stocking Facility: Businesses need to keep track of the true costs of having a stocking facility, including entry and exit fees, monthly fees, and interest, to have a clear understanding of financial impact.
Having a stocking facility for your business can be costly and should be carefully managed. David Gough, a business owner from Chesterfield, shared his experience of having a stocking loan worth 125,000 pounds, but emphasized that the true cost, including entry and exit fees, monthly fees, and interest, is likely more than initially anticipated. It's essential to keep track of these costs and separate them from regular expenses to have a clear understanding of the financial impact. As David mentioned, some people even end up working for their stocking facility instead of their business. However, despite the costs, having a stocking facility can help businesses grow and expand, especially over a longer period. If you're considering getting a stocking facility or already have one, make sure to keep accurate records and budget accordingly. Additionally, if you find value in this conversation and think someone else could benefit from it, please share this podcast episode with them.
