Business/mortgage advice (horsey)

[Ahrena]

HI, I need some life advice as I have no clue how or if this would work. I am extremely lucky in that my mum and I want very similar things in life. Basically at one point I want to set up my own yard, it would definitely start out as a livery yard (mainly part with perhaps a limited number of full because I think part livery is essentially the most profitable [if any really are] due to the extra time full livery takes so would need more staff ect) and either just keep a couple of eventers for myself or hopefully to diversify it a bit and ride for people as well, or perhaps buy and sell some horses, but to begin with at least, the backbone of it would be livery.

My mum wants to live somewhere with land and space to keep our own horses at home, so after years of discussion we have come up with a plan. She has enough money if she sells her house to pay for 2/3 or 3/4 of the kind of property we would want/need and have some left over for any work that needs doing on the property.

Obviously, she's now paid off her own mortgage and doesn't want to be paying another (nor do I want her to as I'm an adult and don't expect her to basically buy me a house and land to have a business on) but I'm currently a working pupil and earn a very low wage. My longterm boyfriend doesn't earn a lot either so I don't think they would just hand us a mortgage (150,000-200,000)

My mum wants me to go to the bank and discuss it but I don't want to go in and have no clue what I'm talking about.

Would I possibly be able to request a business loan/mortgage to cover this? I have a fair amount of savings which would pay my outgoings for a good 6 months or so whilst it was starting out as obviously liveries won't flock as soon as I set up and I have a good
approximate idea of outgoings.


Any advice would be great, I'm clueless!

 

[be positive]

Before you approach a bank you should do a good business plan, they are not going to be impressed with a vague idea and most will have no experience of horse businesses just the knowledge that horses are generally expensive.

To buy a yard, borrow money, pay the loan, pay yourself even just a token amount, it will be hard to make the figures work unless you are in a really good area and fill up very quickly so take that into account with your plan. It might be worth renting a yard for a while to get your business established then look at buying once you have a proven set of accounts for the bank to see.
Your bf income could help as he may well be able to get a loan if his job is going to continue as could your mothers, she may find that having a small mortgage but you paying it is the cheapest way to borrow the money with you possibly taking it over from her later once you are established.

 

[lizstuguinness]

Firstly you are wise not to just run to the bank. They will not listen to you.

You need a business plan which should tell you if this is a good idea or not. There are several templates on the net, or use a banks template. This covers who you are, what experince or special skills you have to attract clients, where are your clients, who and where are your competitors, what do they charge, why are you different them, why will your clients move to you, how will you find your clients, what are the incomings, outgoings, marketing, cash flow, include the tiny things, even down to the hoof picks and hay nets - then add more for unforseen, general 10%.

The big question is how do you get this information? without this info you will not know of this is a risk worth taking or not, the bank will also want to know where you got the infromation and they think you guessed or made it up they wont touch it, so the important thing is to get facts and make sure they aren't from a mate of a mate!

One other thing you could think about is to see about a evening small business class, this would show the bank your very serious and would give you the skills to develop and write the business plan.

Lastly you say your a working pupil? you need to demonstrate what experience you have to your potential clinets. I started my own yard at 17yrs old, and struggled as know one would trust me, all it took was me jumping international BSJA to demontrate that perhaps I did know what i was doing!

if the bank do lend to you they are likely to ask for the land/house as security. Dont forget about a school, tack room etc, sounds simple but based on your calculations above you might struggle to find somewhere large enough with facilities for your budget. renting land, or buying land without the house might also be a good solution - you might get permission at a later date for the house which your mother could then live in. slightly longer term idea, but i doubt your close to retirement age just yet!

Good luck.