Succession Planning

 If you are interested in taking Noroflk Gin forward with us here are some answers to standard due diligence questions

1. Why is the owner selling up?

They are making succession and retirement plans. Their daughter has her career and the grandsons are too young to hand it on to them directly. There are no hidden problems with the business which is profitable.

2. What exactly are you buying? Is this a stand-alone business or a franchise? What is its legal entity. Is it a business that relies on new customers or repeat revenues?

It is a private limited company. It is a stand alone business. It has plenty of repeat business from established customers and continues to acquire new ones. It operates B2C and B2B.

3. Are the premises in good order? If the business trades from commercial property, find out the state of the building. What improvements might you need to make?

Premises are a clean sheet  - making is currently home based. New owner or partnership will have to secure premises. They operate off site fulfilment and storage.

4. What liabilities will you be signing up for?
Liabilities are limited to normal business creditors essentially VAT at any given point and a CIBLS loan. The current owners are creditors. There is a foreword purchase plan for essential components (bottles, stoppers and boxes) 

5. What has the previous owner achieved? Is there room to improve on past performance, or has the business maxed out its opportunity in the area?

They launched the first gin in Norfolk in 2015.   The B2C on line sales was started in 2020. There are opportunities to expand the turnover and number of customers. There is more B2B opportunities to be had and the owners have engaged someone to acquire new B2B customers. With focused marketing effort B2C can be expanded.

6. What mistakes have they made? Ask the owner what they’d do differently if they were starting all over again. It will help ensure you don’t make the same mistakes.

The owners would have

·        raised more capital at the outset

·        engaged sales/marketing team members from the outset

·        Started B2C on line sales earlier

·        Used an accounts package from outset (Using Xero)

7. What reputation does the business have? Spend a few evenings looking at online reviews, speak to other businesses and ask around the local area if you can.

The business is known for its integrity  - product, purchasing and relationships. Company accounts are always published in a timely manner. VAT and Corporation taxes have always been promptly paid.  They source locally whenever possible. They aim to reuse bottles, plastic free packaging and delivery by electric vehicles.

8. Are there any disputes? Is the business facing any legal fights? Are there any ongoing complaints with customers, staff or suppliers?

None.

9. Who is the competition? Spend time researching the business you are buying. And take a look at anyone else that operates in the sector, especially local competition.

There are many ginmakers in the market  - Norfolk Gin's success is attributable

·         flavour and taste - unique and special ensuring satisfaction.

·        Being first

·        Ethics

·        Brand personality

·        UK porcelain bottles

10. What employment contracts are in place? You may have several staffing obligations when taking over a trading entity. It’s important to know what these are.
 

Only the founders are employees on standard ACAS terms.

11. Who will your customers be? Understand the marketplace and how the business you’re buying is positioned. Can you improve its trade, or are there any threats?

B2C - purchasing from the website

B2B - wine merchants, spirit sellers, pubs, bars hotels, wholesalers

Large diverse customer base  - no dominant customers 

12. Why do they buy from this business at the moment? What are its Unique Selling Points, and will these still be relevant when you’re at the helm?

Taste and quality drives the choice of Norfolk Gin

Licenced trade and retailers buy because it looks good and it pleases their customers and it sells well making money for them

13. Can you replicate what the previous owner has achieved? Are they the magic ingredient in the business? And, if so, can you be the same ingredient?
There will be the support of the founders to ensure success whether it is a full purchase or partnership arrangement. The Gin sells itself. It is in essence a very simple business - make and sell.

14. Compare your skills with what’s required in running the business. What are you good at, and where do you struggle. Determine whether the business fits you.

Full training in the gin making will be given. Other than that sound bookkeeping, credit control and logistic planning is what it needs.

15. Ask people you trust whether what they think about the business. To balance your excitement, you need some impartial advice when taking on such a commitment.

16. Ask them whether the business is right for you as well.