Heh, I've direct experience of most of these conundrums. I can say I've been in one situation where the club was forced by a change in circumstance to move from employing someone full-time to essentially all-volunteer on a much smaller scale for a few years, but was able to build things up (with a lot of good will) back to the stage where they could employ someone again and largely get "back to before" despite the unfavourable circumstances persisting. So sometimes it can just be a question of finding ways to absorb the shock and then fixing things more gradually.
DrFfybes wrote:I would say the building is worthless, certainly a flat with 45 years left would be difficult to sell or raise a mortgage on. Once the lease expires will it not revert to the freeholder?
It's not worth nothing - but it is effectively a depreciating asset, so it's not worth £400k either. But potentially somone could find value in having a building for 45 years. It's more risky than a freehold, but it's not worthless.
pompeygazza wrote:Can we secure our loan against the building and how easy is it to do?
Securing loans is the one thing I've not had experience of, but I'd assume it's a question of paying a solicitor to draw up paperwork for both sides to sign.
pompeygazza wrote:This is the only bill the club is going to pay as it's effectively members money being passed on to crown of states (and will give members a year to sort out their boats).
That sounds like your landlord is actually the Crown Estate, the bit of national government that runs the property portfolio attached to the monarchy, notionally on behalf of the King but in reality it just gets used for general government spending.
pompeygazza wrote:Also if it does fold in the future even after our loan is made, who is responsible for selling the building to get our monies back?
If a company folds then an administrator (usually a specialist accountant) is appointed to run the company on behalf of the creditors, and either sell it as a going concern or sell off the assets. An administrator is a bit like a corporate version of the executor of a will.
It depends a bit on the current structure of the club - is it a community amateur sports club (CASC), a limited company, a charity, a partnership or what?
Is it VAT registered?
Just as a general comment - assume any money you put in at this point is gone. Until you've a) worked out the current state of the finances and b)come up with a realistic business plan then you have to assume it's money down the drain. And make sure the committee know that there is no sugar daddy without those two things. Hopefully this will have been a wakeup call for their fantasies, but it never hurts to keep banging that drum.
Normally in this situation the accounts will be a mess. There may be fraud or theft on top of that, probably not, but until the accounts are straightened out then you'll never know. If you have accountants in the club who can help then great, otherwise don't be afraid to pay a bookkeeper to a) straighten things out in the first place and b)spend a bit of time each week/fortnight/month keeping things up to date. It may feel expensive but it's not as expensive as accounts that are in a mess. Hopefully they are using something more sophisticated than Excel to keep the accounts?
Get a cashflow forecast - when do the big lumps of money come in and out? If you have debts then you need to talk to the people concerned ahead of time, explain the situation, how you love them, you've no intention of leaving, you just need a bit of time to sort things out. Usually that kind of approach does buy some time - and if it doesn't, then at least you know where the problems are. HMRC and the rates are usually the difficult ones. IME the Crown Estate can be quite difficult until they get to know you and feel that they can trust you.
Depending on the status there may be grants available, there's all sorts particularly if you can demonstrate community benefit.
Running a bar is a lot more complicated than the average punter realises - if you don't have anyone experience then don't be afraid to ask for help.Make sure insurance is up to date, and your have the paperwork for things like the premise licence - when is it renewed? When's the next fire inspection? Are you OK with Environmental Health? Also you will need a designated premises supervisor with a personal licence to sell alcohol - it's a £100 1-day course.
Purchasing for a bar is a whole other question, there are probably significant savings to be had if you're smart about it but that's something for later, you've got enough on your plate at the moment.
DrFfybes wrote:You could invest in Solar or wind generation to help lower on-costs
The odds are that there's a whole load of quicker fixes, but it's certainly not a stupid idea if the capital is available, and one could structure it so that eg the solar panels are owned by a company owned by PG and friend, and just pay a groundrent to the club if that's allowed. For a typical pub that is using most of the electricity generated, the payback can be as little as ~2 years at current prices, but in this situation it would not be as good as you're just getting export rates for most of the week. On the flip side, if it's a big site, then it may be possible to have ground-mounted PV panels rather than roof-mounted, which saves the cost of scaffolding etc so reduces the payback period. And you could perhaps mount the panels on the roof if the space was needed and more funds were available. Only problem is that everyone wants solar, so I know some installers quoting a year waiting list, 6 months is pretty normal at the moment.
The other question is - what scope is there to increase usage? If you're not opening in the week then it's possible to hire out the room for lectures, pilates, yoga all those kinds of things. OK so it may not be worth opening the bar for the pilates class, but just room rental (net of electric etc) is still cash in the bank.