A deliberate reference to the Who song of the same name in the title, because when I reflected on recent events that seemed to be the song playing in my head - really must take a look at my medication!
During my non-posting (but still writing) period during the summer I had written about the opportunity that was presenting itself with respect to jointly taking over the practice from next April. I've been asked many times over the years, by clients, friends and family, if I would ever consider being my own boss and my answer has remained a constant 'No', partly influenced by health reasons over the past nine years or so and before that a genuine fear that taking on all the responsibility would be beyond my ability. Anyway things moved on between late Summer and late Autumn to the extent that three weeks ago my potential business partner and myself were presented with accounts for the last three years and left to go away and put together a proposal.
The chance to see how the practice was doing, would do and how much it would cost to take on happened to coincide with my weeks holiday and so I spent the Friday afternoon, Saturday morning and Sunday morning looking at spreadsheets, cashflows, projected income and expenditure accounts etc - the perfect busmans holiday but without the actual excitement of driving a bus. The figures made interesting reading and my immediate thought (and it has to be said of my potential partner) was that we would be working for quite a while without any extra financial benefit, that would come later. On closer inspection however it became evident that buying your way into a successful business is a whole lot more expensive than starting from scratch. The borrowing required to make the first payment was just about doable but the capital requirements to take on the debtors and work in progress (so that all monies after 1st April would come to us) combined with the second and third payments for the goodwill blew the idea out of the water completely.
The business is an attractive proposition but weighing up the borrowing required against the length of time needed to repay it (at a level that was sustainable) against the number of years I have before I want to retire meant it was a case of thanks but no thanks. Had I been given the opportunity ten years ago then I think it would have been possible, I could see a situation where the last ten years of my working life could be spent putting away a sizeable nest egg, but working from this point forward this level of finance would leave me with three years at best in which to try and recover the cost of borrowing and it is too big a gamble.
3 comments:
Strangely enough, a similar thing happened to my wife a few years ago. Her boss announced plans to retire and offered all the pharmacists the chance to buy the shop they worked at.
The sum of money we would have needed to find was far too much for people at our age so she declined the offer and eventually went to work somewhere else. I think if we'd bought a Chemist's shop when she qualified in 1985 then we'd be doing well now but taking on a six figure loan in your fifties seemed really scary.
Thanks for the update,it seems a very wise decision but then looking at the blog title, and thinking about it, it must very deflating. Don't get me wrong, I agree entirely from what you have said and I probably wouldn't have got that far to looking at concrete proposals...but 'the Song is Over'...I get the image of a guy brushing his hands and thinking, well, that's that then, maybe in the next life, what now...
Indeed Shy, we're talking about borrowing a huge sum and as you said it is a really scary prospect.
I now have that image in my head too Span. In a way you have summed up neatly the situation, a lot of things are changing and this seemed like the start of a new chapter unfortunately it will be one written by somebody else and that is, as you say, very deflating.
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