Business in real trouble - ideas to help.

niceirishfella

Hi,

Need help and ideas and thoughts here to help a pal in business who's family business is in dire straits and he's at his wits end.
Here's the story -
The got a Haulage and Warehousing Business. During the construction boom they were flat out contracting to a construction materials supplier delivering stuff all over the uk and Ireland. This business has died a death and resulted in them laying off lots of drivers and continuing on with just a small amount of vehicles on the road driven by family members hauling other goods for other clients.
The rest of the vehicles are off the road but still have to be paid for as they are leased and whilst the leasing co's who own them were contacted with a view to returning them etc, they will not take them back and therefore whilst they sit idle, they are costing €1,000's per month. Auctioning off vehicles is not an option as there's a flood of vehicles out there.
The business has substancial warehousing that is empty and cannot be rented easily in this decline. I'm concerning for my mate and their business and would like to help after he asked me for some advice If I were in his shoes.Its quite critical - and could affect their family too.
I was thinking Green - like starting a new green business that uses their warehousing facilites and trucks to get going?
I'm not expert in ECO or GREEN or RECYCLING business's so if anyone here could inform me about this area in business, I'd be much obliged.
Post or Pm me please....

Hope ye can help.

Thanks,

NIF

antoinolachtnai

It is very important that they get correct accounting and legal advice at this point.

The bottom has fallen out of the recycling business. There is no longer the demand for raw materials that there was.

http://www.nytimes.com/2008/12/08/business/08recycle.html?_r=2&partner=rss&emc=rss

To get into this business would involve a lot of risk and going into areas where they don't have expertise, by the sounds of it.

Maybe there is some niche that they can provide warehousing for, but I doubt it. There are a lot of experienced people in this game (including one guy who is on these boards). There is a lot more to the modern logistics game than trucks and warehouses, it's all about systems, processes and information technology and your friend may not have all the necessary strengths.

There might be customers out there who need cheaper shipping, and your friend's company might be in a position to provide it. You never know until you've talked to absolutely everyone.

An option will be to put the business into examinership (or administration in the UK). The basic benefit of this will be to stop the successful parts of the business from being pulled down by the unsuccessful parts.

It may also be an option as part of that process to merge with another business that is in trouble in order to reduce costs.

This will also allow breathing room to find new investors or new customers.

Just from the facts you have presented, I think the planning for this needs to be done pretty urgently. Otherwise they are going to run out of cash. When they run out of cash, the game is over.

As I say, the time for professional advice has probably come. You are welcome to PM me if I can be of any help (I am not an accounting or legal professional, although I do know some of the ropes).

niceirishfella

Thanks Anto,

yes, I thought the recycling game was complicated. Serious investment would be required too and thats a none starter too.
I've racked my brains - and i have no solution.....its a pity.

antoinolachtnai

Look at the examinership or voluntary arrangement. This is the way to go for them if they have a lot of debt coming down on them.

If they basically have an ok business which is paying their way, it an be saved. Something will come along later.

Rex Manning

Depending on the location could the warehouses be changed into either indoor football pitches or maybe an indoor airsoft site?
Another option would be to try and use the lorries for HGV driving lessons.
Both things mightn't be practical or worth the effort but may be putting the assets to a different use might make some cash to tide the company over til things pick up

antoinolachtnai

Those businesses are slow-build, but if the location is right, who knows? Depends on the structure of the buildings too.

MB74

Perhaps you could use the area as secure storage, maybe some repossession companies need storage (car repos particularly).

FusionNet

Hi Nice Irish,

I have one suggestion. It may not be a great one, it may not work as I dont know where your friend is based.

If I had large warehousing and vans or tucks I would look at setting up a personal storage unit. Divide the warehousing into units (like small garages) that can be hired out monthly. With space at a premium for people this is a growing business. If I could hire one wher I am for my summer car I would.

As an added service they could offer to collect stuff for people and use thouse trucks and vans. A storage facility with provided transport. People like to keep stuff but not always in there own shed.

If they use this Idea and they become rich I want a bottle of middleton rare please!!!!!!!!

Hope they get sorted, i do feel for them being self employed myself.

niceirishfella

Thanks for tyhe suggestions lad - the warehousing is extremely secure, alarmed and in a secure compound, so the repo car storage idea could be worth investigating?
Tho' is suspect with the decline in the economy, plenty of space is available now.

antoinolachtnai

It's a question of how cheap you can do it. If you can do it cheaper than anybody else, and if you can reach the right target market, and if there isn't too much administration involved, then it doesn't necessarily matter if the market is saturated. Even one substantial contract could make a big difference.

niceirishfella

Hmmmmmmmmmm, where would he go about finding out what storage fee's are typical at the moment for banks/repo's cos?

niceirishfella

Hi,

Thanks for all the replies/ideas/thoughts so far!
Ok, I'm goinig to give my pal a dig out and see is repo car/vehicle is do-able.
Questions tho - what to charge? Got to make it appealing.
Alosd, who to contact -

I suppose the usual suspects -
AIB Finance and Leasing.
BOI Finance and Leasing.
Bank of Scotland Ireland.
But who else where/are the big players in doling our finance for cars/vans etc. Where would i got to source all this details?

Any help as always, appreciated.

Rgds,

NIF

antoinolachtnai

I suspect that they have the job outsourced somehow. But ring and ask.

I wouldn't talk about money at the outset.

At the end of the day you are selling a covered parking space. You should be able to get a couple of euros a car, a day, I suppose.

Try to figure out what the cost base would be before you get into coming up with a price. There must be some minimum price below which this is just not worth doing.

The other thing is to talk to estate agents about this.

niceirishfella

I'm meeting with him later tonight.

Help needed urgently none - could loose everything.

BarryM3

Hi niceirish....I'm in this business and know the problems he faces. The general transport business is probably the most cut throat there is with regards to price. In these times everyone who gets let go , gets themselves a van and becomes a so called transport company overnight.... These guys will work for pennies and inevitably go bang, only to be followed by another...in the mean time the established firms, such as mine have to try remain competitive despite the higher overheads required to run what I would call a legitimate business.. The industry desperately requires regulation!

If you would like to PM me some details on his business I might have an option or two that could be mutually beneficial..