20) What next?

During our quest for the perfect business we read an advert for a delivery business that sounded promising. We phoned the gentleman and he told us that he was delivering groceries for the local Coles Store in a near by town. We arranged to meet the following day and talk about his business. He gave us the financial records of the business and explained that along with the groceries from Coles he did deliveries from The Bottle Shop and a large departmental store called K. Mart. It was obvious that he was not making a fortune but it seemed like a promising little business until we discovered that he was not including his van in the asking price, this made the business very expensive. We took the paper work to a friend who is a financial advisor he agreed with us that the price was far too high and told us to make the vendor an offer. The price we came up with was about half of the price he was asking but we thought it was fair. After all the business did not have any assets except the contract that he had with the stores. We were not even sure that the stores would be prepared to sign new contracts with us. We were not surprised that our offer was not accepted but we were disappointed.

A couple of weeks later we saw another advert for a delivery business in that same town but this time working out of Woolworth’s that was going for a price closer to the amount we had offered for the first business. We went once again to see the seller and although we did not think that this business was as good as the first one we thought we could make something of it. We told the man we were very interested and he told us that a few days before he had given an option to buy to someone else who seemed to be stalling and was pretty slow coming up with the money. He had agreed to wait a few more days for the money to be paid but promised that if his buyer did not produce the money he would sell to us. That evening he rang to tell us that the money had been deposited into his bank so the sale would be going through. Another disappointment!

We did a bit of research into supermarkets in the area and went and talked to some of the people that were running their delivery services. We thought that we could do better than most of them but none of them wanted to sell. A little while later we saw an advert in the newspaper looking for someone to do deliveries for Coles Store in Erina Fair. Erina Fair is a large modern shopping centre that had just been extended and Coles had not been in there very long. We thought that this was wonderful, just what we had been looking for. Jonny rang the store and talked to the assistant manager a young lady called Kim. She told us how many deliveries we could hope to get each day and what they were prepared to pay us for each delivery. Jonny was stunned; it would not cover our petrol let alone all the other vehicle expenses that we would need to pay out. Kim told us that we would have to have fully comprehensive car insurance and public liability insurance to the tune of $2 million. I wondered if anyone would ever require us to deliver $2 million worth of groceries. Jonny told her that the volume of deliveries would not make it a feasible proposition but she could not promise any more and told us to take it or leave it but she could not do any better.

We mulled it over for a few days and thought that if we could get work from other stores in the shopping centre maybe we could build the business up. We phoned Kim and asked her if she would object to us doing deliveries for other companies as well and she was quite happy with that. Then we approached Woolworth’s and asked if they needed anyone to do their deliveries but they already had an established service and we discovered that their deliveryman who only did Woolworth’s deliveries ran two vans on Thursdays and Fridays so we were encouraged to continue with it. We approached the Franklins supermarket in the shopping centre and the manager was very positive. He just said, “Come”. He had had a deliveryman before who had let him down badly and was looking for someone else. He did not think that the work we got from him would be enough to keep us but he thought that between his deliveries and those from Coles we should get sufficient volume to keep us fairly busy. We then called on the manager of another grocery store that was not actually in Erina Fair shopping centre but situated close enough for us to be able to include them in our runs and they also agreed to use us. So we decided to give it a go and applied to Coles for a “Suppliers Number” and took out the necessary public liability insurance that they required.