My son has had a business idea his friend used to run a business delivering milk to Commercial premises ie (Shops, Pubs, Hotels, Cafes, ect) His friend has since give up the business and moved abroad. My son seems to think that he had a cracking business so he is thinking about doing the same thing he has asked me to lend his ��10,000 to get started I would love to set him up but I would like to now more about it ie (How much it will cost him to buy the milk and how much he could sell it to the corner shops for) as he dose not seem to now a lot about it but on the other hand he is a hard worker and I think if we new a bit more about the trade he would make a really good go of it and I would back him all the way ANY ADVICE WELCOME THE MORE INFO YOU HAVE THE BETTER.
Go to the local dairies and ask. They probably supply the delivery vehicles on a hire basis. I expect your son s mate gave it up because his income was declining. And it probably still is. You need a business plan.
I think having a third party resource that could sit down with both of you and map out the statistics, costs etc to see if it really is a viable business. This way the pressure is not coming from you and the 3rd party may provide some insights you son has not seen. Have your son get a business plan in place and then re-consider the investment. [Along with that, there needs to be a re-payment plan in place]
��10,000 is a huge amount, apart from a van what would the rest be for. You will find that the market for milk is stitched up. The people we used for our catering business could not make any money from it as the larger firms could charge lower prices. As a starter ask at a few shops or restaurants and see who their suppliers are. I think you will find it will be one of several large companies who buy milk by the thousand gallon and re bottle it themselves.
Why are you asking this question. If your son is serious about starting up this business then HE will go and find out all these facts and figures, If he wants you to invest in his business then HE has to come up with a good business plan. He should not be asking you for money unless he can prove on paper that the figures add up, and no investor with any sense would take on a project without the facts and figures being presented to him. Being a hard worker is no guarantee of success if the figures simply do not add up. He should have come up with a detailed business plan before he asked you to even consider backing him. If he won t go and find out these details then he is not committed to the idea. Don t risk your hard-earned cash on this venture unless he is prepared to do the leg-work. It is very easy to risk someone else s money!
Suggest to your son that he contacts his local Business Link for free help and advice on starting his business. They can help with things like his business plan, which is essential before starting any venture and particularly if you re asking someone to invest in it.As has been said elsewhere, ��10k seems a lot for what he s proposing to do. As part of his plan he does need to show how he s going to repay that money.It s also strongly advisable that you set up a formal agreement between the two of you, if he does go ahead and you lend him some money to start. It should set out exactly who has put up what, the effects on ownership of the business, what happens if there s a dispute of any sort and what happens in the event of the business failing. Most disputes in business are about money so it s easier to have an agreement in place before you start rather than trying to thrash things out in a crisis. (My husband and I have had agreements between ourselves in all our business ventures.)As has also been said elsewhere, if he s going to run this business, he should be the one doing the legwork and finding out about it. I fired my son from one of our businesses when he wasn t pulling his weight.
