First Empty Shop Bought (c) 2000 Argyll Group plc & Scotslion Collection
This page – Small Acorns – is actually about the first empty shop we bought. It was to make a point to Highlands & Islands Enterprise (HIE)- that there has to be a better way than just letting empty shops rot away.
To be complete in explaining how this whole enterprise came about, we need to mention the initial seedcorn money. This was obtained from the sale of a building which we tried to renovate going through “normal channels”. That is via the very well funded government HIE Enterprise Agency and matched with a 15% element of bank lending. Our original purchase was the Keil Hotel…
This Large Building Isn’t The Literal Acorn
This hotel released funds after our purchase and resale of the building in the photograph. These profits then helped start this whole Real Dragons’ Den adventure. It is fair to say that the £76,000 profit from this poor old hotel was the catalyst that funded the refurbishment of many closed down shops and created a lot of new jobs during the following 19 years.
Fat lot of use the meeting was with the HIE business support guy. The enterprise agency pessimism-on-steroid merchant was more interested scoffing a sandwich – outwith lunch hours – and at a business meeting. In between spraying us with crumbs, he kept repeating some sort of Dad’s Army style mantra “we’re all doomed“. He couldn’t help the newstart business, inspite of an assurance that an earlier undertaking by HISE to the previous owners by HIE to help would be honoured. An utter and depressing waste of time This was the best that the Highlands & Islands Enterprise had to offer. Between greedy banks stealing private company assets and lazy government funded quango-crats it’s a wonder anyone manages to get a business started in the UK.
In the end, our first project at the Keil Hotel was funded with our own funds. Three friends put their own money up bought the large derelict building pictured above.
Ever since the first project we have worked with 100% equity and a prohibition on any bank finance. We would strongly recommend others consider this element of the business model too.
All in all for this page, perhaps not quite the small acorn that comes to mind. After buying that building and banging our proverbial heads on various bank doors and civil servant’s desk trying to establish a modest line of secured credit to refurbish the property – and just getting knocked back time after time, we ended up saying “enough”. The tragedy is we had a whole floor of that remote hotel partly pre-let as a telephone call centre to a major London plc, with a second floor ready to sign off with another tenant. Many jobs were lost because banks and enterprise agencies couldn’t get their respective acts together.
What we hadn’t expected was that with some decent marketing, and we had a good team on side, the old hotel went for four times what we paid for it.
The two friends became very good friends! The third musketeer used his lump sum to buy several small acorns. Shops. All closed, and slowly, one by one, year by year each was refurbished and various tenants helped in getting a new business started.
Part of The Old, Closed Bank. Now A Thriving Small Business
The picture is just one of 27 buildings re-opened: so far. This is a hobby gone wrong – in a good way. Just a few friends who decided to have a small property adventure. One empty shop reopening at a time. If we can do this, how about you? It is very enjoyable.
During the derelict hotel experience in 1999, there was there was a town meeting about the issue of there being so many empty shops in the area. This was, and still is, a typical problem. Closed shops blighting the High Street of Anytown, UK.
In 2018 keeping small shops from going out of business is still an important topic.
The No Entry Sign Is Metaphor For How Banks Treat Small Business
The shop? Just one of 27 buildings our group of friends bought, refurbished and resold.
One of the key aspects is we kept the rent as low as possible. In 1999 that meant £12 per week for a shop. This handed a new business breathing space to become established without overly high rent, nor high overdraft charges as we provided a modest line of credit to each business where needed.
Back in 1999, some 600 local townsfolk braved a bitterly cold January night to attend a public meeting in an effort to address the problem of closed down shops and other problems blighting a fragile rural economy. The powers that be on the stage said this was the “Tesco Effect”, that small shops which were no longer viable since Tesco opened a superstore nearby. These once vibrant main street shops would need to be converted into flats.
A paw from one of this website’s founding subscribers went into the air and asked the question…
“With shops being so cheap and young folk leaving the town to seek employment in the city hundreds of miles away, would it not be possible for government agencies funded to help revitalise fragile economies, to reopen those small shops and create jobs to stop youngsters having to leave ?”
The response was depressingly predictable from the government “regeneration” officials. Those on stage who tried the “it’ll not work” guff were almost booed off and had miserable scowls on their faces said it all. The HIE man never spoke to our guy again. Not the enterprise agency’s best performance.
In order to make a physical demonstration, and with some of the spare cash left over from the derelict hotel sale, the first empty shop was bought. Around £7,000 for the building with £2,000 on a modest refurbishment. Enabling us to keep the rent very low at £12 per week (6.9% return on the group’s money). We looked everywhere for the “before” photo as it really does show how run down this poor closed building was. The nearest we managed is the picture at the top of this page. But with the first coat of paint already applied. By the way it was our tenant who chose the bright yellow theme!
The “after” photo of this shop – and the next two we bought in this part of town are here…
The old signage was yet to be finished off at the time of this photograph, but it does give an indication of some progress (pictures of the completed project on the next page).
It is not that hard to get these buildings back into meaningful use. One shop here or there results in a couple of jobs. This might not seem that worthwhile, but over two decade this has totalled over 27 shops, industrial units and hotels that have been reopened. Over 107 jobs created and still going strong.
Not one penny of HIE grant money, nor any bank mortgage and the whole process has been far healthier for the absence of these questionable institutions.
This might seem to be small acorns to many, but these newstart businesses go on to pay rates, taxes VAT, National Insurance, PAYE, Fuel Duty, Insurance Tax – a vast range of money that goes into the NHS, education, police and fire services.
On many days, it can seem like an insurmountable struggle, but time after time we have found this Real Dragons’ Den effort an incredibly enjoyable experience. We would heartily recommend you to consider this sort of venture. As to the hurdles and finance?
Lesson: If the banks and enterprise agencies give a depressingly familiar “no”, keep on exploring all other options. Just keep pressing forward – you will win through in the end.