You might decide to buy an existing limousine hire business rather than start your own venture from scratch. Buying a going concern can mean that:
- the vehicles, premises and business equipment are already in place
- there are established customers
- the business can generate income immediately
- repair, servicing and valeting firms have been identified and relationships established with them
- the business has a track record, which can help if you are looking for finance
- drivers and other staff are already in place
- the business website and social media accounts have already been set up
However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up?
Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.
Other matters to consider include:
- the number and condition of any vehicles that you are buying - remember that limousines are expensive to buy, even secondhand
- the state of the premises and any fittings and equipment. Will you have to spend money refurbishing or replacing assets
- the number of existing hire agreements that you will be taking over
- is the existing owner prepared to give you some training after you take over
- existing staff rights
- how to retain key personnel once you've taken over
- does the business owe money that you will be responsible for
- if you are paying for goodwill, to what extent does this depend on the skills, personality and contacts of the seller
Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.
Franchises and licences
Franchising can be a good 'halfway house' between starting out from scratch and buying an existing business. If you purchase a franchise you'll still be setting up your own business, but you'll hopefully benefit from the experience, resources and brand name of a business that is already successful.
There are several franchise opportunities available in the limousine hire business. Although different schemes vary in detail, most feature the following key points:
- as a franchise holder, you will remain self-employed but will use the identity (corporate logos, trade name and so on) of the franchisor
- in return, you will pay the franchisor a fee - this might be a one-off investment, a monthly charge, or a combination of both
- both you and your franchisor will have to fulfil certain obligations and maintain certain minimum standards
Some franchisors will help you with advertising and marketing, and give you advice and support on a range of business and technical matters.
Details of the above points are set out in the franchise agreement or contract, which both you and your franchisor will sign. The agreement will also deal with other matters, for example any territorial exclusivity due to you and the minimum period for which the franchise will run.
Before entering into a franchise agreement, it is advisable to compare the terms of different franchisors to be sure that you are getting a good deal. Go through the contract with your solicitor before signing anything. More information about franchising is available on the Franchise Info website. Information is also available from the British Franchise Association (BFA).