Harral Brokerage

[WJM]

Speaking from direct experience - the taxation of small businesses has increased dramatically in recent years. Even if no other costs went up, this in itself may have been enough to kill this business.

Edited August 25, 2011 by WJM

[charles123]

Quoting from the Waterways World article, Harral was selling approx 140 boats per year.

Well, assuming the average priced boat is £40,000 and commission at 6%, Harral's annual turnover would have been £336,000.

 

Allowing for the costs of renting an office and moorings and advertising space, I imagine there would be a fair sum left for earnings.

So, how come it went bust?

 

I don't know the figures but Harral attracted a high proportion of less saleable boats of lower value that probably filled the yard but did not turn over much and because of this perpetuated the situation. The craning in and out was not theirs either, though they would have had a cut of this income. The nicer boats went elsewhere (that's not to say they did not have a proportion of nice ones). I had heard that sales were more like 2 per week (or up to 2 per week) and as has already been pointed out probably at a lower average revenue. They should have had some revenue as well from charging for storage or on the water (this should have been substantial, if it was not then that would have been a key factor in the demise). A business like this is very vulnerable to fluctuating revenue, it has a substantial fixed cost base, mostly rental of quite a big plot, canal moorings, borrowings, wage costs and other overheads. The contraction from its other brokerage ventures I am guessing was because they did not need Harral as were perfectly capable of running their own brokerages. Most brokers have other strings to their bows, boat building/caravan storage/marinas/repairs etc and do well as a business because of that, Harral did not that I am aware of. Or where stand alone, are at one end of the spectrum internet based therefore low cost to operate and at the other end attracting the highest value boats giving much higher revenue per unit. Harral seemed to be stuck with the same unchanged and dated business plan an an uninspiring and dated web site. Thats my two penny worth anyway

 

Charles

[Gibbo]

Most probably best you do not start a Boat Brokerage Business.

 

Have a greenie. It really does amaze me when people who have apparently never run a business in their whole lives see a company with a few quid turnover and think it's all profit.

[Dominic M]

Have a greenie. It really does amaze me when people who have apparently never run a business in their whole lives see a company with a few quid turnover and think it's all profit.

HelenF is a Chartered Management Accountant with many years' experience in industry, and also ran her own business which she built up and sold a few years ago. She certainly understands the brokerage business because she is my partner (not in my business though). Her observation is sound. And both she and I can tell whoever posted above about costs that corporation tax is only payable on net profit, and VAT does not form part of the turnover and is charged on to the customer over and above the commissions and any other services, if any, supplied.

 

This is not a comment on Harral as a business per se, but a riposte to those who responded to her observation so patronisingly, and incorrectly.

[Guest]

HelenF is a Chartered Management Accountant with many years' experience in industry, and also ran her own business which she built up and sold a few years ago. She certainly understands the brokerage business because she is my partner (not in my business though). Her observation is sound. And both she and I can tell whoever posted above about costs that corporation tax is only payable on net profit, and VAT does not form part of the turnover and is charged on to the customer over and above the commissions and any other services, if any, supplied.

 

This is not a comment on Harral as a business per se, but a riposte to those who responded to her observation so patronisingly, and incorrectly.

I know I am walking on eggshells here, but that was brilliant

[DustyDave]

I went to Harral a few months ago. I found them very helpful and eager to please. Unfortunately I found nothing I liked (in fact I couldn't face some of the boats I was given keys to look around). Nothing special about Harral - I found exactly the same at Whilton (how can they give keys to a boat which had bits of trim dangling around waiting to poke my eyes out?). One of the things I really couldn't understand was Harral expected to sell boats sat out of the water. I wanted to buy a boat which floated - I couldn't tell if they floated when they were sat on concrete.

 

Still sorry to see anybody go out of business.

 

Dave

[Gibbo]

HelenF is a Chartered Management Accountant with many years' experience in industry, and also ran her own business which she built up and sold a few years ago. She certainly understands the brokerage business because she is my partner (not in my business though). Her observation is sound. And both she and I can tell whoever posted above about costs that corporation tax is only payable on net profit, and VAT does not form part of the turnover and is charged on to the customer over and above the commissions and any other services, if any, supplied.

 

This is not a comment on Harral as a business per se, but a riposte to those who responded to her observation so patronisingly, and incorrectly.

 

Please explain how she didn't understand that (her guestimate) a turnover of £336,000 is not even close to being enough to support a business with that amount of moorings and hardstanding, let alone pay wages, rates, other runnings costs, and still make a profit. It simply isn't close to being enough.

[Dominic M]

Please explain how she didn't understand that (her guestimate) a turnover of £336,000 is not even close to being enough to support a business with that amount of moorings and hardstanding, let alone pay wages, rates, other runnings costs, and still make a profit. It simply isn't close to being enough.

Sorry Gibbo, but it is way more than enough. You have to accept that I know that first hand: I run a brokerage and I know what the overheads are. I also worked previously for ABNB, a very successful business whose turnover was pretty similar to the stated figure HelenF employed, at that time. I know what my average boat sale price achieved is over past financial years, I know what the rent is, the rates, the advertising costs, the insurance, the heat, light and power, the wage costs. If you want to find some examples of the rental costs for a wharf like Wincham, then look at some that are on the market. North Kilworth, where the rent is £30k p.a., or Middlewich, where it is c. £17k p.a. If you take BWML's accounts where they declare that the rents they pay to BW are on a commercial basis decided by an independent body, then each of their 18 marinas (which have a minimum of 100 berths) works out to an average £38k p.a.

 

Assuming the owner is hands on, how many employees does one need to answer the telephone and help to show people round the boats (or in many well reported instances at certain brokerages, simply toss the keys to the customer and carry on posting on Facebook, Twitter or even CWDF)?

 

So where else is the £336k spent?

Edited August 25, 2011 by Dominic M

[Gibbo]

Sorry Gibbo, but it is way more than enough. You have to accept that I know that first hand: I run a brokerage and I know what the overheads are. I also worked previously for ABNB, a very successful business whose turnover was pretty similar to the stated figure HelenF employed, at that time. I know what my average boat sale price achieved is over past financial years, I know what the rent is, the rates, the advertising costs, the insurance, the heat, light and power, the wage costs. If you want to find some examples of the rental costs for a wharf like Wincham, then look at some that are on the market. North Kilworth, where the rent is £30k p.a., or Middlewich, where it is c. £17k p.a. If you take BWML's accounts where they declare that the rents they pay to BW are on a commercial basis decided by an independent body, then each of their 18 marinas (which have a minimum of 100 berths) works out to an average £38k p.a.

 

Assuming the owner is hands on, how many employees does one need to answer the telephone and help to show people round the boats (or in many well reported instances at certain brokerages, simply toss the keys to the customer and carry on posting on Facebook, Twitter or even CWDF)?

 

But I think that's the main problem. They didn't rent that marina at those sorts of rents. They rented space in a marina from the leaseholder plus about 2 acres of industrial hardstanding. The leaseholder seems to be the main one he couldn't pay. I'm not certain on this but I believe they had about 9 full time staff.

Edited August 25, 2011 by Gibbo

[Dominic M]

But I think that's the main problem. They didn't rent that marina at those sorts of rents. They rented space in a marina from the leaseholder plus about 2 acres of industrial hardstanding. The leaseholder seems to be the main one he couldn't pay. I'm not certain on this but I believe they had about 9 full time staff.

9 full time staff? Doing what? No, forget I asked that question. It's not my business. I'll stick with my business model

[Gibbo]

9 full time staff? Doing what? No, forget I asked that question. It's not my business. I'll stick with my business model

 

I'm not going to speculate on a forum but I do know that the guesstimated turnover was not enough to support the business at those premises.

[cotswoldsman]

HelenF is a Chartered Management Accountant with many years' experience in industry, and also ran her own business which she built up and sold a few years ago. She certainly understands the brokerage business because she is my partner (not in my business though). Her observation is sound. And both she and I can tell whoever posted above about costs that corporation tax is only payable on net profit, and VAT does not form part of the turnover and is charged on to the customer over and above the commissions and any other services, if any, supplied.

 

This is not a comment on Harral as a business per se, but a riposte to those who responded to her observation so patronisingly, and incorrectly.

 

My comment was based more on the figures provided. You might well prove me wrong but I found it hard to believe that one brokerage was selling on average 3 boats a week at £40,000 and getting 6% commission on all those boats.

[RichardH]

9 full time staff? Doing what? No, forget I asked that question. It's not my business. I'll stick with my business model

 

Indeed, certainly not cleaning boats or making them more presentable.

 

We took a boat there last year and there was an office full of people.

 

I can't imagine that a full 2 page spread in the glossy mags each month is cheap but even assuming 25k p/a on ads it still leaves a reasonable slice of the pot left.

 

People do assume though that good turnover means good profit. Quite often when meeting guests in our business they unsubtley hint that we spend all winter counting the vast profits we have made just because they perceive that their weeks holiday is quite expensive. Rarely I bite but I did ask one chap who told me his profession what his company charged him out at £500 p/h came the reply - there you go I said, you have had 3 hours of my time training you, an hour of admin, 5 hours of cleaning, 1 hours of service engineeer and a week on a 65k asset for a couple of hours of your time.

Edited August 26, 2011 by RichardH

[charles123]

A turnover of £300k is more than adequate to support a healthy profitable business here. The number of boats now sold as I have said appears lower and I doubt the figures in the first place from waterways world as it is likely that Harall would have talked these up for the article and may have included the other marina brokerage sales that were there then. My guess is that he borrowed against this business a couple of years back to do what I don't know, repayments would have increased dramatically in recent times and these costs added to the running costs make a loss, in any event it looks like some external factor added to the demise, but all speculation of course. The winner is the landlord who on the face of it might be seen as the loser as money was owed, but this would be taken into his own accounts to offset his profits on which he would have paid out corporation tax. He has no realistic option but to carry on with the brokerage otherwise he has the depreciation to pay on his crane, and the costs of building its slipway and developing the site for the brokerage and no income from his linear moorings or the hardstanding if it ceased business. He picks up an established business for nothing, can either develop it as it has more potential that Harall could not see, or sell it on where it with become a string to another waterways business. There is of course the new marina at Park Farm about 2 miles away approx. 2 thirds complete. The staff should be ok, I would guess 2 in the office and a couple of part timers in the yard. The losers apart from the owner, are mostly the bank and VAT man

 

Charles

[dor]

S'funny, the other thread on this seems to have disappeared. What happened?

 

Here it is!

[Gibbo]

A turnover of £300k is more than adequate to support a healthy profitable business here.

 

Not if the overheads are £301k

[dor]

And of course it does rather depend on how much you take out of the business in drawings etc.

[Chloe]

We were saddened to hear about the situation that has arisen at Harral Brokerage. Given the thousands and thousands of pounds Steve has made over the years from the business we would expect him to honour his debts. Our sympathies lie with Richard, Sharon and Frank. We can only applaud Dave Massey's decision to take over what would be a mess. We have known Dave to be an honest and decent business man. We wish them every success for the future; and would not hesitate to recommend them to anybody considering selling their boat.

 

Having moved numerous boats over the years for Steve, it was our conscience that made us, after many sleepless nights, decide to call it a day!

 

Does anyone know where he is? My money's on finding Gaddafi before you find Steve!

 

Talk o' Devil

[byjingo]

We were saddened to hear about the situation that has arisen at Harral Brokerage. Given the thousands and thousands of pounds Steve has made over the years from the business we would expect him to honour his debts. Our sympathies lie with Richard, Sharon and Frank. We can only applaud Dave Massey's decision to take over what would be a mess. We have known Dave to be an honest and decent business man. We wish them every success for the future; and would not hesitate to recommend them to anybody considering selling their boat.

 

Having moved numerous boats over the years for Steve, it was our conscience that made us, after many sleepless nights, decide to call it a day!

 

Does anyone know where he is? My money's on finding Gaddafi before you find Steve!

 

Talk o' Devil

[carlt]

Cue the rush of anonymous new members, joining just to stick the boot in.

[Timleech]

Cue the rush of anonymous new members, joining just to stick the boot in.

 

 

All a bit strange.

 

[byjingo]

Steve is alive and well and still trying to rescue his business. Dave Massey seems to be becoming a hero in all of this. Has anyone wondered why Wincham Wharf has become a ghost town since they were forced to leave because of high rents?

[mayalld]

Steve is alive and well and still trying to rescue his business. Dave Massey seems to be becoming a hero in all of this. Has anyone wondered why Wincham Wharf has become a ghost town since they were forced to leave because of high rents?

 

 

Not half as much as I wonder who is behind all the anonymous accounts that have been created to post on this subject.

[Liam]

Steve is alive and well and still trying to rescue his business. Dave Massey seems to be becoming a hero in all of this. Has anyone wondered why Wincham Wharf has become a ghost town since they were forced to leave because of high rents?

 

Hiya, I'd heard you had moved, is that the reason why? Thought you had a good set up where you were.

 

Liam.

[Josher]

Bit late with this one - feel for the vendors with no boat or money, Ouch!

 

Monday 05 September 2011 Blue Sheets Harral Brokerage Services in receivership - Narrowboat broker closes doors after 15 years.

 

Harral Brokerage Services, one of the biggest independent brokerage companies on the inland waterways, has gone into receivership, writes Harry Arnold. Based at Wincham Wharf on the northern end of the Trent & Mersey Canal near Northwich, Harral Brokerage Services ceased trading on 23 August when its landlord took over the premises. Established in January 1996, Harral gained a reputation for being the premier broker of narrowboats in the northern part of the waterways and usually had between 60 and 100 boats for sale, including a new semi-bespoke boat, based on a standard design and built at Wincham Wharf. As well as brokering boats the company also offered to buy them for cash.

 

Stephen Harral told Boating Business he was devastated, and particularly sorry for two boat owners whose craft had been sold and the money not paid over to them. Some buyers had also paid deposits on the purchase of boats, but these were fairly small nominal amounts and he thought there was no reason why the purchases should not go ahead. He said the company had few trade creditors and there were assets to be sold which should cover some of the debts. Mr Harral also said considerable goodwill had been expressed to him from the waterway industry generally and he had already been offered sites to operate from and boats to sell.