Advice on potential purchase of a workshop

[George Khayat]

Hi Everyone

I'm coming to the end of my training as a furniture maker. Down in Devon and saw this workshop nearby. Just wondering whether anyone has any opinions on the price/set up.

https://www.facebook.com/marketplac...wse_serp:54783196-d494-47f6-8a71-b30c286462b4

Don't think I'll be using the 4 head tennoner, but certainly all the other stuff. Just been finding it hard to get a fix on how much the machines are worth...

Thank you so much for any help.

George

https://www.facebook.com/marketplac...wse_serp:54783196-d494-47f6-8a71-b30c286462b4

 

[Spectric]

Is that just the purchase of machinery and then you rent the building or what for £18,500. You need to price the machines as if buying new and then things might be more clearer. The other issue is you need a business case, it is alright making stuff but you need to ensure you have a market that will buy it, I assume you will be looking at furniture and bespoke kitchens to capture a bigger market.

 

[Yojevol]

If he's nearby I'd get down there and have a chat. Go through the list with him and see how he's built up the valuation. You'll still need to do some research to make your own assessment but you'll have a much better idea of the setup. This standard of machinery holds its value so if you have the capital the more significant factor will be the overheads so a bit of number crunching with the seller will be beneficial.
If you can make the numbers work it sounds a very attractive proposition.
Good Luck
Brian

 

[Etaf]

based on the post - it seems its just the price equipment - so need to discuss the new lease and all those costs, if you are thinking of using the workshop
Along with the equipment if you choose not to relocate it, a new lease can be drawn up with the landlord at the the current premises. (See details below)
but a lot more research maybe needed
and as mentioned - Pop along have a chat , see what he was making and the equipment condition

 

[niall Y]

The machines alone seem to be a fair deal. but the trouble with starting out a business by buying everything you need in one go is that it can place you in a risky position, especially if you have to borrow the money.

Should you take on the lease and machines, and have the money sorted, without strings attached, you still need to work out where your earnings will be coming from. What you ideally need is work and lots of it- you also need a realistic idea if what you can accomplish in one day to get your pricings right.

The guy selling the stuff could well be being altruistic, but I suspect that dealers may well have already offered him less than he is asking for the machines, after all they have to make a profit . If he can induce anyone to take over the whole project it will cost him a whole lot less than if he had to off-load the bits and pieces, piecemeal, whilst terminating his contract with the landlord, and transporting and putting the unsold machines in storage .

So to sum up, the machines are worth the price but whether the complete set up is risk free is another matter. After all there is already a business operating from that site, and they are selling up.

 

[Jacob]

I guess it'll be mostly 3 phase which is excellent if you are using the stuff but lowers the resale price and could make difficult any future move.
I'd worry more about the building/premises, location, size, rent, rates, insulation and heating. The kit is just a detail in terms of long term expenditure.

 

[Sideways]

My first glance at it was I'd start negotiating at nearer £12k

Buying someone else's bundle means they have either done a good job of picking machines that suit whatever they did, or they've gathered some random selection. If you were starting from scratch, you'd gather machines that suit what you want to do.
I assume you know what the local market wants / what you can do / how you are going to move materials in and finished product out to wherever your customers are. If not, do that before spending.

That table saw is nice if it suits your work - @deema and myself swear by them - but they come up on ebay for £1000. Tough as old boots but you can't buy spares, only other machines to strip.
The bandsaw's a big beast. Do you need one that big ? Big can mean a limited resale market as folk don't have room for them.
The planer looks OK but doubt it's worth over £2k used
SCM spindles are good £2-3k ? Spindle tooling has value, be especially interested in what blocks he has.
Don't assume the cutters he's selling will be any use to you. Depends on the job.
Dust extract is galvanised so it's sitting outdoor rotting and can be big / awkward to relocate and adapt into new premises if you move. Don't be oversold on that.
Morticer looks good
4 head tenoner looks tired (?). If you won't use it, it isn't worth much to you. Just a chore to sell on and only worth what someone else will pay for it.
Benches and all that are nice to have but you're going to value them at 20% of new / cost, not 70%, right ?

You can't always control the market price for what you do so you need to negotiate hard and control costs so there's some profit in the business.

It might be a great opportunity, I'm trying to make sure you go to see it with cold hard reason in the forefront of your mind

 

[Sam Kilby]

Obviously one significant saving that you can either take into account or not is the time and money involved in finding, bidding, collecting, installing etc. just ducting for extraction and getting a sparkie in to drop outlets in the right place would cost thousands.
This might add up to 6 months unpaid, all whilst paying rent..
and then building storage and cabinetry etc, if available will save a heap of money too. But not like he can sell it for anything to anyone else really !
Is he also offering the trading name and current clientele, if you want it ? Is that worth anything ?

 

[Sam Kilby]

Also check max capacity of machinery. Lots of “panel saws” can’t take a full 8x4 sheet, and loads can’t take the slightly larger mfc, if you plan on using it..

 

[George Khayat]

Is that just the purchase of machinery and then you rent the building or what for £18,500. You need to price the machines as if buying new and then things might be more clearer. The other issue is you need a business case, it is alright making stuff but you need to ensure you have a market that will buy it, I assume you will be looking at furniture and bespoke kitchens to capture a bigger market.

Hi Roy, thank you for the message. Yes, you're assumption is correct - the price is for the gear, the lease would need to be renegotiated with the leaseholder (currently £420 a month). I've been putting together a price list of the machines from what I can find on the internet. Some harder to find than others! I actually work as a writer by night, so the need to start turning a profit straight away is not so pressing. Thanks again for the advice. George

 

[George Khayat]

If he's nearby I'd get down there and have a chat. Go through the list with him and see how he's built up the valuation. You'll still need to do some research to make your own assessment but you'll have a much better idea of the setup. This standard of machinery holds its value so if you have the capital the more significant factor will be the overheads so a bit of number crunching with the seller will be beneficial.
If you can make the numbers work it sounds a very attractive proposition.
Good Luck
Brian

Hi Brian. Thanks a lot for the advice. I did actually go down a couple of months ago (when the price was £20,000), and asked as many questions as I could think of. I did ask how he priced it, and he said by the value of the machines + cost to transport and the fact it is a 'walk-in and get going straight away' sort of situation. I'm just putting together a list of machine prices. The lease is £420, so pretty good. Cheers again for the help. George

 

[George Khayat]

based on the post - it seems its just the price equipment - so need to discuss the new lease and all those costs, if you are thinking of using the workshop
Along with the equipment if you choose not to relocate it, a new lease can be drawn up with the landlord at the the current premises. (See details below)
but a lot more research maybe needed
and as mentioned - Pop along have a chat , see what he was making and the equipment condition

Thanks Wayne. Putting together a list today and know the lease is £420 a month plus very reasonable electricity costs (the site has solar panels). Will go down and see him again to have an other chat. Thanks. George

 

[George Khayat]

The machines alone seem to be a fair deal. but the trouble with starting out a business by buying everything you need in one go is that it can place you in a risky position, especially if you have to borrow the money.

Should you take on the lease and machines, and have the money sorted, without strings attached, you still need to work out where your earnings will be coming from. What you ideally need is work and lots of it- you also need a realistic idea if what you can accomplish in one day to get your pricings right.

The guy selling the stuff could well be being altruistic, but I suspect that dealers may well have already offered him less than he is asking for the machines, after all they have to make a profit . If he can induce anyone to take over the whole project it will cost him a whole lot less than if he had to off-load the bits and pieces, piecemeal, whilst terminating his contract with the landlord, and transporting and putting the unsold machines in storage .

So to sum up, the machines are worth the price but whether the complete set up is risk free is another matter. After all there is already a business operating from that site, and they are selling up.

Hello Niall. Thanks a lot for this. I can get the money together without strings attached (but not 18,500, would have to be less). Although I am training right now, I still work a job as a writer at night, so I am not too stressed about getting work immediately when I finish the course. I have managed to secure a few commissions off the back of a piece I have made here, so that should keep me busy to start. As for what I can do in a day, I need some time without asking tutors for help every 10 minutes to work that out! Really interesting about the dealer bit, I hadn't thought of that. I like you know how much easier it would be to sell it all to one person (when I went to visit, he did acknowledge that himself). He says he is selling up because he wants to go back on-site, essentially work for someone else rather than himself. It is very quite in this part of Devon, and high end furniture makers are few and far between... Anyway, thank you for your help and have a great day.
George

 

[George Khayat]

I guess it'll be mostly 3 phase which is excellent if you are using the stuff but lowers the resale price and could make difficult any future move.
I'd worry more about the building/premises, location, size, rent, rates, insulation and heating. The kit is just a detail in terms of long term expenditure.

HI Jacob, thanks for the message. It is mostly 3 phase, but i didnt know/think about the resale issue so that is good to know, especially since i suspect I'd upgrade kit in due course. Kit aside, the building has a good feel, and is only 7 minutes from my house. Although how long I'll be there is up for debate, so the quality of the kit is pretty important to me. It is unheated, save a space heater. Rent is 420 a month, and I saw his electricty costs and they were very reasonable as they have solar panels on site. I have asked around about the landlord, apparently he's fair and he doesn't miss a trick. Thanks again for the help. George

 

[Etaf]

I have managed to secure a few commissions off the back of a piece I have made here,

Not sure what you are making. Has that/those items been priced based on paying all the overheads for a workshop - rent/bills/insurance/depreciation/material/wear&tear etc etc
I know when my dad (carpenter/cabinet maker) started turning bowls and other items , he was having difficulty just recouping the cost of some of the wood costs.

and high end furniture makers are few and far between.

Perhaps a reason for this in Devon, OR maybe there is a gap in the market .....But that would need a lot of research

 

[George Khayat]

My first glance at it was I'd start negotiating at nearer £12k

Buying someone else's bundle means they have either done a good job of picking machines that suit whatever they did, or they've gathered some random selection. If you were starting from scratch, you'd gather machines that suit what you want to do.
I assume you know what the local market wants / what you can do / how you are going to move materials in and finished product out to wherever your customers are. If not, do that before spending.

That table saw is nice if it suits your work - @deema and myself swear by them - but they come up on ebay for £1000. Tough as old boots but you can't buy spares, only other machines to strip.
The bandsaw's a big beast. Do you need one that big ? Big can mean a limited resale market as folk don't have room for them.
The planer looks OK but doubt it's worth over £2k used
SCM spindles are good £2-3k ? Spindle tooling has value, be especially interested in what blocks he has.
Don't assume the cutters he's selling will be any use to you. Depends on the job.
Dust extract is galvanised so it's sitting outdoor rotting and can be big / awkward to relocate and adapt into new premises if you move. Don't be oversold on that.
Morticer looks good
4 head tenoner looks tired (?). If you won't use it, it isn't worth much to you. Just a chore to sell on and only worth what someone else will pay for it.
Benches and all that are nice to have but you're going to value them at 20% of new / cost, not 70%, right ?

You can't always control the market price for what you do so you need to negotiate hard and control costs so there's some profit in the business.

It might be a great opportunity, I'm trying to make sure you go to see it with cold hard reason in the forefront of your mind

Hi Sideways. This has been incredibly helpful. Thank you very much.

The actual building is solid and has a good feel. It's close to me and the rent is good. It is well located (for Devon). I have another income so the stress of turning a profit pronto is not too high.

As to machines and price, 12k makes sense, that was close to where I was thinking of starting. And yes, if I was curating the lot myself, I would have chosen differently on certain things. Then again, I only have experience of the machines we have here at school. I do own my own bandsaw, which I compulsively bought in a state of over-excitement pre starting my course. It is the old version of this I think https://www.axminstertools.com/axminster-professional-ap2920b-bandsaw-230v-108517. Brand new.

At school we have a Felder, which is more heavy duty than mine. We use it a lot for roughing out + finer work such as cutting box tops off, some work on tenons etc. I know I am not really answering your question as to whether I would need something as big as a Wadkin, but I am not actually sure. I would definitely need a proper fence, which I can see it doesn't have. I am a bit dubious about after market ones/putting one on, but my experience is limited.

I have been advised to buy a thicknesser as we have separate setups here for planing and thicknessing. I have had experience of issues when using a planer/thicknesser for both jobs as the accuracy has wavered. A restorer friend has given me his old one, but it looks like something from 1810. Saying that he rates it... So I could use that in the interim. We have digital dials here at school and they are handy. The one at this potential workshop doesnt have that. Sorry, bit of a brain dump, but I think it is helping me spell it out!

What you say about the table is interesting. Again, something we use a lot here, for accurate work. The issue with spares is good to know...

Re. Spindle cutters, I need to go back again and look them over.

He was keen to point out the money I'm saving on extraction, but I wont be there forever and I wouldnt take it with me. But i concede that having it set up is nice.

Yeah, I am pretty sure i don't want the tennoner. And it is enormous and I don't relish selling it on. This is also a quite part of the country...

As for benches, yes i agree they are nice and will value at 20% as I have no doubt I'll need to get them as flat as I want them, not just for joinery work.

I suppose I should finish with saying that I was drawn to the opportunity as it is nearby and sort of ready to go. I am however aware that, as I have said and you mentioned, I am not choosing the machines I want. But against that is that I am nervous about leaving my training and not having somewhere to get on and keep making. I don't want what I have learnt to fade away. I could go work for someone else but I am tied to Devon for at least a year and the opportunities to work in a high end furniture makers nearby are pretty limited. The right job that fits would be great, but none are up for grabs near me right now. I do have a steady income already, so my priority is progressing as a maker and continuing to do something which i actually really enjoy. I have commissions in the pipe line too.

Lastly, I am aware that the machines I would probably want are going to cost me more than 12-15k. But then I am just starting out and experience is limited so even that assumption might be wrong!

Anyway, sorry that is all over the place but your reply has been very helpful. Thank you again.

 

[George Khayat]

Obviously one significant saving that you can either take into account or not is the time and money involved in finding, bidding, collecting, installing etc. just ducting for extraction and getting a sparkie in to drop outlets in the right place would cost thousands.
This might add up to 6 months unpaid, all whilst paying rent..
and then building storage and cabinetry etc, if available will save a heap of money too. But not like he can sell it for anything to anyone else really !
Is he also offering the trading name and current clientele, if you want it ? Is that worth anything ?

Hi Sam, thanks for help. Yes, getting the gear there and set up would be a chore and a lot of money. And you're right about storage and cabinetry, and also that he can't really sell it to anyone else! He isn't offering a trade name, but that isn't something I would be interested in. He was also mostly doing joinery, whereas I would be making more high-end (hopefully!) furniture. Thanks again.

 

[George Khayat]

Also check max capacity of machinery. Lots of “panel saws” can’t take a full 8x4 sheet, and loads can’t take the slightly larger mfc, if you plan on using it..

ah, good to know. He did say it could handle 8x4, but I'll have another look

 

[AJB Temple]

If the current tenant intends to go back on site, that suggests he has not made enough money to sustain the workshop. If furniture makers in the area are few and far between, then there is a reason for that: supply tends to be attracted to demand. He is not selling it as a going concern, so he has no customers to pass on by the sound of it. Think about why that is. Think very carefully about how you will get business. If you do decide to take it on, try to negotiate a rent free period or reduced rent period with the landlord. For him, some money is better than an empty building. Find out if the contract with the landlord requires the tenant to return the building empty and made good. If it does, factor in the cost he (machinery seller) is saving through not having to get everything moved.

 

[Etaf]

as you have a couple of commissions - maybe just as a quick *** packet example - you could proportion the overheads and say depreciation over 3or 5years of all the kit - inclue some replacement wear and tear plus your daily/hourly rate , and of course the wood material / polish/paint costs and see what price those items would really need to be - I know its not accurate - but may give you an idea on how viable High end furniture may be
Also have a look , maybe even get some quotes for some make belief items from other makers
simple spreadsheet really to work out a daily cost / hourly cost - maybe assume 70 % productivity - dont know the sums for a manufacturing unit - but often did that within the service world

we have a Pine maker locally and have used him for various bespoke furniture items, cabinets , bookcases and a TV unit and hes pricing has been very competative for some off the shelf items and we were happy to pay the extra premium to get bespoke and exactly what we wanted.
I know if we went for some of his standard size bookcases , a lot cheaper as he was all Jiged up tp make that size and much quicker
i just provided drawing and dimensions and discussed the finish etc
Moved house and sold the items as no good for where we moved to - BUT we are back in discussion for more items

same for a shed form a local maker - worked out about £300 more than off the shelf - but much much better material used and the old one removed and they installed on the existing paving. Also had a small bespoke one made to my dimensions - still have that